It moved to low forties and stayed bound in a tight range of 28.40-43 for most of the day. The market is nervous ahead the rate meeting of the central bank and caution pushes the koruna slightly weaker. Drop of the zloty weighted, too.
Vice-governor Singer said yesterday, he would not present at the upcoming meeting. However, it doesn’t change balance of opinions in the CNB Board in fact. Although he’s in favor of a rate cut, he’s expected to vote in line with governor Tuma. All in all, we still believe governor decides the meeting.
Today no data are due, but return of U.S. player after American holiday may bring some impulse to the markets. Nevertheless, the koruna may be still cautious and range bound. It might hover around the 28.40 level.
In a longer perspective we still see the koruna strong and even an interest rate cut may not harm it significantly. Buy-on-dips seems to be good strategy for these days.
(CSOB - Investment research)