The koruna started weakening in morning trading and a few times broke the
limit of 31 against the euro. The Czech currency began at 30.925 EUR/CZK in
the morning, weakened to 31.080 and closed at 31.060. The USD/CZK rate
retreated from 31.720 to 31.900 when it closed. The exchange rate of USD/CZK
reflected both loosing CZK against the euro and the euro versus USD.
Investor's sentiment towards CZK is still pessimistic ( fight of Czech
National Bank with the koruna, expectation of a rate cut, efflux of
investment, budget deficit), they transfer their funds abroad. The negative
sentiment against the koruna is emphasised by closing positions before the
weekend. Only the result of yesterday's EU summit might help to break the
trend. We anticipate the EUR/CZK in the range of 30.950 - 31.250 and the
USD/CZK from 31.500 to 32.100. The koruna started at 31.120 per euro and at
31.820 per dollar in the morning.
open max min cls open 25/10
EUR/CZK 30.925 31.080 30.815 31.060 31.120
USD/CZK 31.720 31.930 31.600 31.900 31.820
Stepanka Kuzilkova, Investment Research, CSOB