The Czech koruna is getting stronger and
stronger. The unit completely repeated
Monday’s development, initially, there was
no price action and the market was rather
quiet. However, the koruna started to rise
rapidly at 3 p.m. It strengthened from the low
fifties to EUR/CZK 31.38 over the last two
hours of the session. It seems to be obvious
that opening of American markets brings
strengthening of the koruna. As on Monday,
EUR/CZK broke another support level.
There was again no particular reason, which
we could directly connect with the koruna
rise. Nevertheless it is worth noting that a
higher-than-expected increase of producer
prices (0.9 %) raise likelihood of two interest (0.9 %) raise likelihood of two interest
rates hikes by the end of the year. That is of
course koruna positive. Moreover, Minister
of informatics said that he see finish of the
sale of Cesky Telecom in March next year.
The sale should bring significant inflow of
the single currency.
Today, another technical barrier of
strengthening lays ahead at EUR/CZK
31.30. It will be tough task to break it.
However, the market sentiment is very
positive now. Let us remind that the market
completely ignored disastrous current
account data in recent days. Thus, although
some correction is not completely excluded
we expect the koruna to rise again.
ČSOB - denní finanční zpravodaj