The entire region was falling on Friday, and the Slovak koruna followed the trend. From the opening level of 37.0 the unit lost close to 37.20, but later bounced back and ended the session at 37.14. We are of the opinion that the recent koruna strengthening has been fast, which means the EURSKK is likely to stabilise in the near term, probably close to the level of 37.00. Regarding trading today, the koruna might recoup part of its previous losses, but remains exposed to the possible uncertainty. Potential weakening of other regional currencies might drag the koruna down, but the 37.20 should be a solid resistance.
The calendar is busy this week with the market focusing on the Q4 GDP release on Thursday. The growth should be confirmed at 7.5 % y/y, but the detailed structure will be more important. Should household consumption prove to be the main driving force behind the growth (in which we do not believe) or at least to grow at a fast pace, further tightening of the monetary policy cannot be ruled out. If so, this should be koruna supportive.