The Czech koruna firmed by 20 hallers to 30.280 after the publication of the
result of the meeting between cabinet ministers and the CNB about extending
their fight against the strong koruna but then corrected and closed at
30.400. Governor Z. Tuma repeated that the koruna's exchange rate was still
overvalued. Against the dollar the koruna firmed from 31.180 back below the
31.000 koruna's level to 30.850 and closed at 31.000.
A catchword will have
tomorrow's Bank Board meeting. The majority of the market does not
anticipate an interest rate cut even now and assumes that the CNB will
likely wait for more statistical data and possibly cut in October. We guess
that the rate cut tomorrow is possible as new statistical data should not
bring any new information, the koruna is still strong and moreover the CNB
and the government extended their agreement. We expect the EUR/CZK in
roughly the same band as it moved yesterday, i.e. form 30.250 - 30.500. The
koruna opened at 30.350 per euro and at 30.910 per dollar in the morning.
open max min cls open 25/9
EUR/CZK 30.460 30.480 30.280 30.400 30.350
USD/CZK 31.180 31.210 30.850 31.000 30.910
Stepanka Kuzilkova, Investment Research, CSOB