Yesterday the Czech koruna stayed in a tight range after depreciation in previous day

Yesterday the Czech koruna stayed in a tight range after depreciation in previous day. It more or less ignored domestic events including the signature of the deal with Hyundai (a new USD 1bn factory will be built) and stayed under the influence of region.

That should be the case also for today. We believe that the regional mood should remain vulnerable as there is a permanent risk of growing yields in the core markets. Furthermore growing risk aversion of global investors arising from US stocks falls should play against the central European currencies as well. On the other hand most of the regional currencies are currently near strong levels and we do not believe in significant losses. We continue to see the crucial support of the Czech currency at 28.46/28.56 EUR/CZK.

(CSOB - Investment research)