The Czech koruna initially hit the new twoyear
high of EUR/CZK 30.25 on Friday.
However, it slid back above the level 30.30
on the rising dollar in the afternoon. Finally it
closed at EUR/CZK 30.40 zone. The story
behind was the same as in the previous
days; investors buys dollar on its any
upswing. On the other hand, traders still
believe in the stronger koruna, thus the
koruna still has room to climb given the flat
dollar.
Today the most interesting item in the
calendar is the December inflation.
Consumer prices climbed only 0.1 %, thus annual inflation dropped to 2.8 %. Only the
rise of food prices pushed the price level
higher last month. The Labor ministry said
simultaneously the unemployment rate rose
somewhat more in the December from 8.9
% to 9.5 %. That’s another argument for
unchanged CNB’s interest rates in the first
half of the year. Nevertheless, that are no
breaking news, hence the koruna may
ignore the whole release. We expect the
currency to hover around 30.35, because
the market is not ready to penetrate
stronger values for the moment, and in the
longer term is supported by privatization
inflows.
ČSOB - Investment Research