The Slovak koruna weakened from around EUR/SKK 37.400 to EUR/SKK 37.650 on Friday. The reason for this move was the adjustment in emerging markets and koruna was driven to some extent by the neighbouring currencies. However, the unit corrected its losses to EUR/SKK 37.600 at the end of the session. Investors flew from emerging markets due to rising yields elsewhere in the world. The flash GDP for Q1 2006 is on the agenda today. But we do not expect strong reaction to domestic data this week. The new range for EUR/SKK should be 37.500–37.700. The next key resistance level is EUR/SKK 37.850. The domestic currency should continue to feel depreciation pressure as the repatriation of dividends is on the way during May and June and the early Parliamentary elections are around the corner.
(CSOB - Investment research)