The Czech koruna inched lower in a quiet
session yesterday. It lost some five hellers
against the common currency when it
opened at EUR/CZK 30.40. The November current account backed the move, as posted
slightly larger than expected deficit, namely
CZK 6.1 bn. Nevertheless, the deficit was
below the 2004 average figure thus it’s not
signal to be cautious. Moreover, deficit for
first 11 months was mildly below the figure
for the same period of 2003. Given huge
trade balance surplus, balance of services
lagged behind expectation. This part of
current account is in troubles for several
recent years. The most watched income
balance posted usual deficit CZK 10.7 bn,
that’s same as in previous months. On the
financial account of balance of payments
was the most striking large investments of
Czech residents into foreign bonds and even
stocks.
Today the PPI figure may affect the market.
Producer prices fell 0.3 % in December,
more than expected. The move was drug by
4.283 -0.09 falling raw material prices. The results is
supportive for holding interest rates
unchanged for a measured period. It is
slightly negative for the forex market, thus
we expect the currency to be initially under
mild pressure to weaken. Nevertheless, it
should not persist longer time.
ČSOB - Investment Research