The Czech koruna extended its gains from the beginning of the week as the sentiment towards the region remained positive. That was mainly due to continuous weakness of US dollar that naturally attracts attention towards Central Europe. The interest of foreign investors was further enhanced by the rumors that the Hungarian government prepares significant cuts in public spending. Hence the koruna approached life-time highs in the early afternoon, but turned back towards 28.29 later in the session.
For today the ECB meeting and following press-conference should be decisive. We therefore do not bet on further significant gains till the afternoon as the EUR/CZK currently is not far from strong support levels (28.22).
(CSOB - Investment research)