The Czech koruna traded sideways yesterday and closed almost flat

The Czech koruna traded sideways yesterday. The unit initially fell to 31.95, but it closed almost flat at 31.78. Politicians did not deliver any significant impetus for the market. Mr. Spidla finally brought to President Klaus the resignation. President Klaus led series of talks with the leaders of the key parties. However, there is no real idea how could be the shape of a new government. We might not expect any action till Wednesday. Today is last day before long weekend in Czechia. The markets will be again opened as late as on Wednesday. It implies a danger of higher market volatility because of low liquidity. Moreover, holiday is on Monday also in USA therefore US-based banks might square their position in the Czech koruna. Overall we expect calm trading today.

ČSOB - Investment Research