The Czech koruna firmed to a new 2.5-year high yesterday. It opened stronger and touched EUR/CZK 29.83 in the morning. The weak dollar was the main impulse behind the morning price action. Some investors were pushed to square their dollar position and it caused inflow of dollars and euros on the market. Traders ignored political row in that moment. However, the sentiment reversed in the noon. Jitters from political situation and tomorrow’s meeting of central bank reappeared. Thus the koruna lost some gains to close at EUR/CZK 29.88 only little change compare to previous day. Today the calendar is empty and we don’t see any other significant impetus for the market. Thus the koruna might trade sideways ahead of the central bank’s meeting.
ČSOB - Investment Research