Even on Friday the Czech koruna followed
a recent pattern; a new day, a new 2-year
high. The unit climbed to EUR/CZK 30.775
to close little of the peak at 30.795 on last
day of the previous week. The koruna
strengthened slowly during the whole
session, unaffected by any fresh impetus.
The currency is pushed higher by expected
inflow of foreign currencies linked to state
asset sell-off and a new issue of the Czech
government eurobond worth EUR 1-1.5 bn,
which will be likely offer in the middle of the next year.
Today, the key foreign trade data for
October are due. The koruna may rise
further unlike trade gap post figure
significantly beyond the forecast. Foreign
trade posted CZK 4.2 bn deficit and
matched our forecast. The figure is only
negligible worse than market consensus,
thus it should be more or less neutral for
the koruna. October trade data confirm
positive development of the Czech
economy, which heads to a record low fullyear
trade deficit at CZK 43.0 bn. Balance
of payment data due later should not affect
the market, because it’s only revision of
already released data for Q3. This week is
full of important economic releases, but from
the forex market point of view only today’s
trade data could really move the market.
ČSOB - Investment Research