The koruna did not resume the Monday´s strengthening and was flat yesterday

The Czech koruna was flat on Monday, it did not resume in Monday’s strengthening. The unit stayed in the tight range of EUR/CZK 31.38 – 31.45 to close unchanged at 31.40. There wasn’t any relevant event for the market yesterday. Vice-governor Niedermayer again repeated that there is no need for imminent rate hike (how many other affirmations should we receive from the central bank officials ahead of next week’s CNB Board meeting?). Niedermayer added that he was skeptical the Czech republic would adopt the euro in 2010 because of lack of any real government effort. He only explicitly said what everybody knew. However, the government still have a lot of time and it could change its attitude in time. Today the only event is a tender of 5-year benchmark. It supposed to be largely oversubscribed, but it wouldn’t affect the forex market. We expect calm trading and no significant price action by next Wednesday.

ČSOB - Investment Research