It opened at EUR/CZK 29.34, but it quickly lost 0.3 %. The koruna even touched 29.55 around the noon. There was no single reason behind the price action. First, there was negative atmosphere on neighboring markets. Second, traders were afraid of the central bank, which could intervene or cut interest rates. Finally, previous jump of the koruna might inspire some investors to take their profits. One way market stopped around the noon and the koruna hovered around 29.46 until the end of the day. The Central bank’s decision not to act helped to stabilize the market. Traders completely ignored the four quarter GDP, which came in at 4.3 %. That’s highest growth for 9 years.
Today. the January industrial output is due, but we do not expect significant market reaction. Thus the sentiment in the region might be decisive. The pressure on CE currencies may weaken thus the trading should be sideways oriented.
(CSOB - Investment research)