The Czech koruna pared another part of its previous losses on Friday. It opened at
EUR/CZK 28.60, where it traded in the morning. However, a typical market pattern occurred in the afternoon. As the situation on emerging markets calmed down, traders squared their long euro-position and the koruna jumped up to 28.46. There was no particular event to speak of.
The mood toward the koruna is positive now, since investors are not afraid of emerging markets. Furthermore, the central bank showed rather high tolerance to a strong koruna last week. Finally, the markets expects another large trade surplus due on Tuesday. On the other hand, the EUR/CZK is near strong technical support at 28.46, which may hamper a downward movement.
(CSOB - Investment research)