The Czech koruna calmed down on Friday

The Czech koruna calmed down on Friday. The unit again tested a downward trend, but the effort wasn’t successful. The koruna touched EUR/CZK 30.295, but quickly returned to the low twenties where closed a day before. The rate cut only mildly harmed the currency so far. Thus we regard a band EUR/CZK 30.00-30.30 still appropriate. The koruna got some support from vice-governor Niedermayer, who named interest rates changes as the key measure of the central bank. He regards direct interventions as only rare measure and he rejects verbal intervention at all. Today, the koruna may stay in established range EUR/CZK 30.15-30.30. No domestic event may disturb the market. The first impetus may come on Friday, when trade data are due.

ČSOB