The Czech koruna tested the level of
EUR/CZK 31.40 on Monday. It opened little
weaker compare to Friday and more or less
ignored fresh strong data on inflation and
unemployment in the first minutes after the
release. Although consumer process were
driven to 2.5 years high by a spike of high
crude prices we could find out slight
domestic cyclical pressures in inflation. The
strong drop of unemployment supports this
view on the economy. Nevertheless, it can
hardly change the view of the central bank,
hence we are not any closer to a eventual rate hike.
Anyway, the koruna slowly started to
strengthen from the EUR/CZK intra-day
high, which stood at 31.50. Atmosphere on
other CE markets was supportive for such
move. Thus, the unit rose to the EUR/CZK
31.39 by the end of the trading session.
Today, the Minutes from the last CNB board
meeting are due. It hardly brinks any
breaking news, but it is definitely worth to
watch. Traders likely try to push the koruna
higher, but the resistance at EUR/CZK 31.40
could impede them. The market is not very
active now with predominance of corporate
orders.
ČSOB - Investment Research