Initially, it lost ground and tumbled to EUR/CZK 28.68 in step with its regional peers. Overall negative atmosphere was behind, plenty of negative factors influence the market: weekend Hungarian polls, political disputes in Poland, ECB’s meeting… However, the CE markets bounced back quickly, we can blame somewhat positive outcome from talks between Polish PiS and PO, which makes enter of Polish populist into the government less likely. Surprisingly dovish ECB’s president Trichet supported positive movement of the currencies. Summing up, the koruna was again little changed in the end of the day.
The market shrugged off drop in construction activity in February, which was caused by cold weather. Today the atmosphere in the region might be decisive again. No domestic data are due today, but the next week will be pretty busy. Moreover, traders may wait for U.S payrolls due in the afternoon. Strong recovery of the dollar is slightly negative for the koruna.
(CSOB - Investment research)