On Thursday the Czech koruna did not pay too much attention to the dovish comments coming from CNB earlier this week. In the morning it was boosted by further gains of the Polish zloty and firmed up to 28.28 EUR/CZK. Finally the koruna did not feel comfortable staying under 28.30, and trimmed most of its gains to close at 28.36.
Given the empty calendar domestic economic events, the koruna should track the regional sentiment also during today. As we believe in further gains of Polish zloty (expected good result of industrial production), also the Czech koruna can extend gains today. Nevertheless threat of a rate cut (CNB meeting is scheduled for next Thursday) should prevent the Czech currency from breaking through further technical barriers, specifically the EUR/CZK 28.28.
(CSOB - Investment research)