The Slovak koruna weakened on Thursday from EUR/SKK 37.72 to EUR/SKK 37.89. The main driving force behind the move was ECB rate setting meeting. European central bank raised rates by 25 bps and reduced slightly the positive interest rate differential of SKK. However, some market participants expected bolder hike and koruna retreated after the ECB decision. The Parliamentary elections are also a key factor of SKK weakness. Yesterday, the released final GDP figure did not bring any surprise. But structure of GDP showed that further rate hikes are earlier or later in the pipeline. Today, foreign trade is on the agenda. But we think the market will ignore domestic data and will follow the region at least till the election.
(CSOB - Investment research)