All eyes were on the Slovak and the Polish market with both central banks deciding on interest rates. The SKK rallied after the Slovak interest rate decision but, as usual, the SKK move didn’t spill over into the Czech market. The Czech Prime Minister reconfirmed his view that Czech companies should be able to handle a gradual strengthening of the CZK. So, in this respect he countered recent complaints from Czech exporters on the strong koruna. The reaction of the CZK on this again was very subdued. Hyundai reiterated that it is close to a deal on a EUR 1 bln Czech investment, but as long as there is no final ´yes´, this kind of headlines is not able anymore to spark any market reaction. So, EUR/CZK held a tight range close to the 28.30 barrier throughout the session. Even the (delayed) Polish interest rate decision didn’t really impact the market.
Today, the Czech eco calendar only contains the Czech monthly budget figure but it is no market mover. So we hold on to our view that the CZK is still in a long-standing up trend but that there is no trigger available to push it for a test (or a break) of the EUR/CZK 28,225 barrier yet.
(CSOB - Investment research)