The Czech koruna opened rather strong at
31.34, but it slightly weakened whole trading
session. Nonetheless, the unit lost ground
at the end of the day and closed at 31.45.
Nevertheless the activity on the market was quite low.
Today, we see the koruna to fall. The
government seems to be very weak after a
European Parliament election. The Social
Democrats lost the election and the smallest
government party the Freedom Union is on
the edge of the collapse. Moreover justice
minister Cermak resigned on Saturday.
Therefore we expect reconstruction of the
government and we do not exclude even a confidence vote in the Parliament.
ČSOB Investment Research