The Czech koruna retreated from 20-month
high on Tuesday nevertheless, the unit was
steady throughout the session. Mainly profit
taking was the reason for the slump,
because there was no particular reason for
the fall. Even on Monday the traders were
very cautious and they were not able push
the koruna further. Thus, it was the time to
take a profit when neither interest rate hike
probability nor political situation have changed significantly.
Today, we might see an attempt to break the
31.50 level but we do not expect more
profound drop of the currency because the market is rather calm now.
ČSOB - Investment Research