The Czech currency was loosing together with other EU candidates' currencies
on jitters of Saturday's Irish referendum. Dutch coalition crisis added
further market uncertainty, as the coalition's partners were divided over
the enlargement of the EU to the East Europe.
The strongest Christian
democrats (CDA) support the EC proposal from last week, the other partners -
liberal VVD and populist LPF refuse the enlargement. The koruna fell against
the euro from 30.850 to 31.080 and closed at 31.050. The koruna did not
fare well vs. the dollar; it dropped to 31.650 from the initial 31.400. We
anticipate that the koruna weakens further as the referendum is coming near.
We expect the EUR/CZK to trade at 30.950 - 31.150 and the USD/CZK at 31.450
- 31.950. The EUR/CZK opened at 31.020 and the USD/CZK at 31.710 in the
open max min cls open 17/10
EUR/CZK 30.850 31.080 30.820 31.050 31.020
USD/CZK 31.400 31.650 31.360 31.630 31.710
Stepanka Kuzilkova, Investment Research, CSOB