The Czech koruna slightly weakened on
Friday in subdued trade on market jitters
that PM Vladimir Spidla might go. However PM Vladimir Spidla might go. However
the koruna kept in a tight range of 31.75 and
31.87. Spidla intends to ask parliament for
confidence probably on Thursday to fortify
his position as a head of Social Democrats
and government before a key weekend’s
meeting of leading body of the party.
Leaders of Social Democrats have been
under fire since election for European
parliament which the party lost. We see as
a main scenario that Spidla will survive both
votes, in Parliament and in his own party.
Only opposition Civil Democrats are calling
for early election now, other key opposition
Communist party wants to make coalition
with Social Democrats without today’s
government parties Peoples Democrats and
the Freedom Union. Therefore we evaluate
early election as the least probable scenario.
Today, calendar is empty, but political
uncertainty might harm the koruna. Hence
we expect the koruna to lose some ground.
ČSOB - Investment Research