The koruna weakened versus the euro due to large clients' orders immediately
after the opening of trading. We cannot exclude also the CNB's activities.
The koruna slid from 30.330 to 30.470 EURCZK. Later during the day the
koruna erased part of its losses to close at 30.385. The central government
budget deficit release didn't have any impact on the koruna. Against the
dollar the koruna slipped from its morning level of 30.670 to 30.870. We
don't expect any important events for the forex market today, the EUR/CZK
should stay rangebound at 30.200 - 30.500. Against the dollar the koruna
should stay within 30.800 - 31.300. This morning the EUR/CZK opened at
30.380 and the USD/CZK at 30.900.
The CNB governor Zdenek Tuma admitted the current rate of the koruna was
strong and overvalued and that the CNB was still ready to take action. The
CNB wants to keep interest rates flat for the time being after the radical
cuts made earlier this year, he added.
The central government budget deficit narrowed to CZK 21.4 bn at the end of
September in comparison with August's deficit of CZK 33 bn. The budget
deficit for the ninth months of previous year was CZK 22.7 bn.
open max min cls open 2/10
EUR/CZK 30.330 30.470 30.330 30.385 30.380
USD/CZK 30.670 30.870 30.660 30.870 30.900
CSOB, Investment Research
Na Prikope 14, Praha 1