The koruna kept strengthening against the euro, stayed calm against the dollar

The EUR/CZK reached another peak against the euro. The koruna slightly weakened against the euro during morning trading from 29.250 to 29.430 due to concerns of CNB intervention. However, the koruna started firming again in the afternoon and touched another record at 29.070. The EUR/CZK closed at 29.160. The koruna remained calm against the dollar and moved in the range of 29.360 - 29.650. The USD/CZK closed at 29.520.

Budget deficit release had no impact on the koruna. The state budget deficit shrank to CZK 0.9bn in June from CZK32.4bn reported in late May and in the first half of the year the deficit reached CZK29.7bn. CNB vice governor L.Niedermayer stated for BBC yesterday, that current level of EUR/CZK is not in line with economy development. If CNB don't intervene today the koruna might break the level of CZK 29 for the euro. We expect the EUR/CZK to move in the range of 29.000 - 29.300 and the USD/CZK should move between 29.350 - 29.850.

		open	high	low	close	today (2.7.)
EUR/CZK	29.200	29.425	29.070	29.170	29.230
USD/CZK	29.400	29.680	29.400	29.500	29.700

Stepanka Kuzilkova, Investment Research, CSOB