The Czech koruna rebounded yesterday. It started on a weaker footing, as it opened at EUR/CZK 28.58. However, it immediately bounced back into the high forties. The higher-than-expected January inflation helped the unit only mildly. The fact that political situation in Slovakia eased weighted more. In the rest of the session the koruna traded in the narrow band 28.45-52 with a firming bias. Therefore it closed stronger at the 28.44 level. The 14-year tender, which showed strong demand failed to affect the FX market.
Today and tomorrow the domestic calendar is not attractive for the market. Thus the currency may continue to trade sideways in the band of 28.30-28.56. Some incentive may come on Monday, when the December current account is due. Since a dividend outflow is rather volatile the C/A could surprise both directions.
ČSOB - Investment Research