CNB's absence on the market resulted in strengthening of the koruna on
Tuesday afternoon, which intensified before the end of trading. Above all,
London banks were interested in buying korunas. The EUR/CZK opened at
29.965, it touched 29.680 during the day and closed at 29.780. Morning
release of GDP along with the good industrial output figures did not affect
the koruna. Against the dollar the koruna fell only gently, because the
dollar strengthening versus the euro was eliminated by the EUR/CZK
development.
The action of the central bank is possible at every moment at
these levels of the EUR/CZK, on condition that the CNB didn't decide to wait
for a self-correction or for the CNB Bank Board meeting tomorrow. We
anticipate the EUR/CZK within 29.600-30.200. This morning the EUR/CZK
started at 29.830 and USD/CZK at 30.600. The CNB published minutes form the
Bank Board meeting yesterday. It is apparent that the central bank is ready
to intervene or to cut rates if necessary. Industrial output rose by 10.8%
y/y in July. GDP for Q2 2002 grew by 2.5% y/y in line with our prediction.
open max min cls open
EUR/CZK 29.965 30.025 29.680 29.780 29.830
USD/CZK 30.500 30.730 30.490 30.570 30.600
Stepanka Kuzilkova, Investment Research, CSOB