The Czech koruna inched higher on Friday.
Initially, it started weak, as touched daily low
EUR/CZK 30.515 in the first hour of the
session. However the atmosphere change
quickly and the koruna drifted higher to
EUR/CZK 30.36. In last hours of the day,
bears won again, hence the currency closed
little stronger at 30.45 zone. There was not
real domestic event behind Friday’s price
action. Nevertheless worlds of vice-governor
Dedek and the low PPI weren’t supportive
for the koruna. First, the November PPI fell
0.3 % and diminished hopes for interest rate
hike any sooner than early fall. Dedek
confirmed such a rate outlook, as he quoted
he didn’t see any arguments for an activist
policy that would mean cutting or raising
rates in any way. Moreover, he added that
his analyses gave no ground for further
firming of the koruna. On the other hand, he
don’t regard recent koruna strengthening as
fatal. He explicitly said: ”We are not in the
same situation like in 2002.”
Today the November retail sales moderate
rise, namely 8% y/y, should not be stimuli for the market. Thus the koruna may stay little
changed within previous trading band.
ČSOB - Investment Research