Positive regional sentiment was today affected by Hungary’s rating downgrade by Standard & Poor’s. The Czech koruna thus could not keep morning gains and closed at yesterday’s level of 28.38 CZK/EUR. The rate against the US dollar closed at 22.43 CZK/USD.
Local news had no impact on the koruna. S&P punished Hungary for fiscal relaxedness and HUF fell to new 2.5-year low of 273 HUF/EUR. Such a move was naturally followed by a regional sell-off.
The US dollar was shot down by lower net inflow of capital into US assets in April. USD 46.7 billion was not enough to satisfy investor’s expectations of 65 billion and USD 63 billion April trade gap neither. The currency swiftly reached daily minimum at 1.2656 USD/EUR.
We expect the koruna in range 28.10 to 28.48 CZK/EUR tomorrow. We use 1.2590 USD/EUR as an interesting resistance level for the dollar.