We saw a pretty eventful trading session in
the Czech FX market on Friday. Initially,
strong second quarter GDP growth data
lifted the Czech koruna. The unit opened at
level CZK/EUR 31.78, but it shut to
CZK/EUR 31.69 on surprisingly high
economy growth. However, all time high
monthly current account deficit sent the
koruna back to CZK/EUR 31.82. However,
the EUR/CZK didn’t broke resistance at 31.82 (one-week high) even on disastrous
C/A data, thus the koruna changed the tide.
The unit gradually strengthened over the
afternoon together with other CE currencies
and closed near EUR/CZK 31.64. A failure
of dominant Czech power supplier CEZ in
tender for majority control in Slovak
electricity producer Slovenske Elektrarne
also helped.
Today, the koruna may develop sideways
pattern, as no significant events are
scheduled. The EUR/CZK is near technical
support thus we do not see large room for
the koruna to strengthen.
ČSOB - Investment Research