The continued to fall Turkish lira’s sell-off negatively affected the Czech koruna at the beginning of the week. Nevertheless the depreciation of the Czech currency was relatively mild in compare with other emerging markets and Central European currencies. While the Turkish lira lost nearly 10% in the last two sessions, the koruna sledded only by 1% and trimmed most of the losses till the end of the session.
Good result of the Czech industrial output (see the News) could provide slight support to the currency today. On the other hand the global sentiment towards emerging markets should be decisive for the FX once again. As we rather believe in temporary effects of current sell off, we bet that koruna should stay under strong support level at 28.46 EUR/CZK in the upcoming days.
(CSOB - Investment research)