The Czech koruna was little higher on Friday morning, but was little changed for the rest of the day. The unit was locked in pretty tight range of EUR/CZK 29.71-29.81. The koruna kept all its Thursday’s gains, as retreat of foreign investors from the Central Europe abated. The market lacked any domestic stimuli. Today no data are due thus the sentiment towards the region may play decisive role again. Nevertheless, the koruna could be under some pressure of long-lasting crisis within ruling coalition. During the weekend, Miroslav Kalousek, leader of the junior coalition partner Christian Democrats, said his party asks replacement of Prime Minister Stanislav Gross or early election. However, the Social Democrats stand strongly behind their leader and Prime Minister. The Social democrats will vote new leader on their congress next weekend. Gross is expected to win, hence the Christian Democrats will have to prove how serious is their current warning in few days.
(CSOB - Investment research)