The CNB discussed possibilities of appropriate interventions against the
koruna yesterday, but it did not intervene immediately. According to Jan
Frait the usage of interventions on the forex market would be premature in
present time. Oldrich Dedek added that interventions were effective only at
the time when nobody expected them.
The recent development of the EUR/CZK
entitles the application of all the CNB instruments. The Czech currency
strengthened in response to the unlucky comment on intervention. The koruna
reached 29.370 and closed at 29.400. Versus the dollar beat the level of
30.000 and rose as far as at 29.700. The USD/CZK closed at 29.800.
Yesterday's CNB statement means that either the intervention or rate cut or
both might be at any time, the market will be very nervous on these levels
and will focus each step of the CNB. If the CNB doesn't intervene soon,
coming near to the 29.000 level is more than likely. Today the EUR/CZK
started at 29.395 and the USD/CZK at 29.750.
open max min cls open 28/6
EUR/CZK 29.965 30.065 29.370 29.400 29.395
USD/CZK 30.430 30.500 29.700 29.800 29.750
Stepanka Kuzilkova
CSOB, Investment Research