The Czech currency slowly weakened yesterday, as it tracked other emerging markets. However the losses were much lower than the zloty or the forint made. Traders didn’t find any inspiration in domestic nor world events. Thus, the koruna remained in its current trading band EUR/CZK 28.45/68. The currency opened near the weaker limit of the band to move to the opposite side over the session. The rebound of the dollar against major currencies weighted on the whole region. Furthermore, continuing political row in Poland also deteriorate market atmosphere. Today, the calendar is not attractive for the FX traders. A 15-year tender has usually minimal effect on the market. Thus our preferred scenario is that the koruna may again trade sideways within the range of 28.50/70. However the market waits for any strong incentive, which should push the koruna out of the range. Since we regard that negative factors slightly exceeds positive ones we see an attempt to come back to previous band of 28.70/90 as more likely in days to come.
ČSOB - Investment research