The Czech koruna opened slightly weaker at EUR/CZK 29.975 yesterday, but the market quickly changed direction. Initial nervousness ahead of the meeting of the central bank disappeared, because more and more traders started to believe that the bank would hold the rates unchanged. Thus koruna almost ignored the decision not to cut rates in the end. The pace of strengthening slowed down in the afternoon and the koruna closed at 29.85. Latter on the Central bank’s press conference brought nothing really exciting (more in bond section). As usual in these days, the koruna ignored a political row development. The situation didn’t change yesterday, there is still no accord within ruling coalition, only the Prime Minister Gross quoted that he wanted to solve the crisis by the mid of the next week either way. His Social Democrats more and more push to quit junior coalition partner Christian Democrats from the government. CurrenciesClosechangeEUR/CZK29.86-0.09EUR/HUF242.350.15EUR/PLN3.935-0.01USD/PLN2.9840.00EUR/SKK37.85-0.04EUR/SIT239.67-0.01.
Today the calendar is empty and moreover the next week is not busy, too. Thus the market have to work only with recent information and watch a political development. We see the koruna inches slightly higher today.
(CSOB Investment research)