The Czech koruna tested multi-week low at EUR/CZK 28.62 on Friday. The Czech market followed regional sell-off which was triggered by ECB president Trichet hawkish comments on Eurozone economy. The koruna opened weak at 28.50 and twice over the day attacked the barrier at 28.60. However, it didn’t succeed and stayed within the long-lasting band of 28.25/62. The minutes from the last CNB Board meeting failed to impress the market. It confirmed the CNB could live with the koruna at current levels. They rely on the ECB, which means on a widening negative interest rate differential. That should lift some strengthening pressure on the Czech currency. All in all, the minutes were more or less positive for the koruna.
Today the calendar is empty, but the week ahead will be pretty busy. Trade balance, inflation, and GDP are due, and all figures might be positive for the koruna. Therefore, the koruna may move higher within the current trading band over the week. Today the EUR/CZK may stay just below the upper limit of the band.