We were not alone bored by Czech forex
market. The koruna finally retreated from its
2-year high yesterday. The rebound of US
dollar was likely a trigger for correction in the
region. The koruna began to fall just after it
opened at EUR/CZK 30.705. In the middle of
the day it touched EUR/CZK 30.960 and
turned back to close at EUR/CZK 30.84. A
buying of euros was broad-based, but may
not last. Traders took some profits made on
recent koruna strengthening and tested
technical market levels. However it doesn’t
seems to us that foreign players decided to
square all their position in korunas. The all their position in korunas. The
market ignored yesterday statistical
releases. Nevertheless lower-than-expected
inflation and poor construction activity could
have supported a negative trend. On the
other hand, no one believes that even these
figures could change the central bank view
on the monetary policy for the month to
come.
Today, we consider the koruna develop a
sideways pattern as most likely scenario.
Traders yesterday found out that the market
is not ready for massive correction. On the
other hand, they may not want to push the
koruna higher ahead of tomorrow’s GDP
figure.
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