The Slovak koruna weakened together with
the region as investors reduced their
exposure ahead of the Fed meeting on
Wednesday. The unit slid from around
EUR/SKK 37.30 to EUR/SKK 37.50. Some
traders squared their positions as the Fed
decision is the main driving force also for the
CE-4 markets. Slovak koruna copied the
development of the neighbouring zloty.
However, local currency should find support
around 37.50-37.60.
The industrial
production was double the forecasted
number as it rose by 15.3% mainly due to
the revival in the auto sector. The released
figures support the chance for an interest
rate hike at the end of May. Retail sales and
wages should set the tone for today’s
trading. At 10.0% Y/Y retails sales also were
stronger than expected. Question is whether
this will be enough to decouple from the
broader trend in the region. So, watch
EUR/PLN and EUR/USD for the impetus.
(CSOB - Investment research)