The Czech koruna extended its recovery
yesterday. The unit traded sideways until 2
pm but it climbed in the rest of the day. The
sentiment on the market finally changed
yesterday as Merrill Lynch raised its forecast
for the koruna. Moreover, traders figured
that EUR/CZK resistance at level 32.00 was
strong enough therefore they changed their
view on the koruna and began to push
koruna higher. Furthermore, some investors
bet that today’s foreign trade would show only low deficit.
Today, the July trade deficit is the key event.
Only CZK 4.88 bn deficit vs. CZK 8 bn
market forecast pushes the koruna up to
EURCZK 31.62. Thus, the unit may continue to rise in the rest of the day.
ČSOB - Investment Research