The Czech koruna recovered from Monday's 2-week low yesterday. The EUR/CZK opened just below 32.60 against the euro. In the midday the koruna began to strengthen after ruling coalition managed to delay the key VAT law vote till Thursday, when they should override presidential veto. It should prevent feared chaos in foreign trade after May 1, when the Czech Republic will joint the EU. Moreover, the tide turned because a German bank was said to fulfill a big sell order. Accordingly the currency closed at 32.40 against the euro. Today, the koruna should continue strengthening. Traders will try to test the barriers at the lower end of the current range in days to come.
ČSOB - Investment Research