It opened at EUR/CZK 30.05, but it rose to 29.93 in the morning when traders priced in CZK 5.2 bn trade surplus. The koruna rose despite strengthening of the dollar and slightly worse atmosphere on other CE markets. Later on, the unit erased part of its gains to close at the 30.00 zone, little changed from previous day. The politics had little impact on the market. No significant progress on this field occurred. Czech koruna rose on trade surplus (3D) Today, the main issue will be the government regular meeting. As we wrote before the Freedom Union may decide whether it leave the government or not. PM Gross signaled that him and his Social Democrats would not resign. Gross wants to joint his request for confidence with such a bill, which center and right parties in the Parliament couldn’t refuse. However these parties already found the defense against such strategy, they suggest the same bill to the Parliament but without confidence vote. However, the most important item on agenda is privatization of Cesky Telecom. There is pretty big chance that the government will agree the sale to Telefonica, because of very high offered price. It should have slightly positive effect on the market, but it does not imply any direct flow on the FX market just now. Thus, the market could be again volatile today. The sale of Cesky Telecom could balance negative influence of the politics.
(CSOB - Investment research)