The Czech koruna rose to a fresh threeweek
high yesterday. Initially, it hovered
around the level EUR/CZK 31.65, but later
shot up and broke technical levels at 31.57
and even at 31.53. The EUR/CZK touched
31.48 and closed at low fifties. The koruna
rose on better regional sentiment, as the
Hungarian forint stopped falling and also the
Slovak koruna added some positive
influence. Furthermore, Friday’s better-thanexpected
GDP growth played some role
again. Finally, a failure of dominant Czech
power supplier CEZ in tender for majority
control in Slovak electricity producer Slovenske Elektrarne also helped.
Today, August’s producer prices are due,
but hardly affects the market. Yesterday, the
EUR/CZK broke many supports thus it may
be difficult for the unit to gain another
ground. Thus we are cautious to predict
more strengthening today. A flat price action
is likely.
ČSOB - Investment Research