The Czech koruna closely tracked the
Hungarian forint, which did not provided a
clear direction for the Czech FX market
yesterday. The EUR/CZK reached its intraday
low at 28.48, while both weaker forint
and Slovak koruna pushed the pair higher
and it closed at 28.515.
Looking at the political scene things are
getting more complicated again as coalition
talks among the ODS, Christian Democrats
and Greens have become tougher as first
serious disputes over a programme of a new
government arose. Moreover, MP’s of the
Social Democrats (CSSD), whose support is
needed to establish the center-right
government, rediscovered their tough stance
against the forming coalition and they
repeated that they still refuse to support the
coalition in Parliament, unless the forming
coalition government accepts several key
points from CSSD’s economic programme.
And this will not be easy for the ODS.
Hence, an agreement between the forming
coalition and CSSD is still far from over a
done deal.
Today, the domestic FX market will definitely
monitor a development in the region, where
the forin and currently Slovak koruna are the
key drivers. Unless we will see some kind of
consolidation especially in the Hungarian
market, the EUR/CZK will stay close the
28.60 resistance.
ČSOB Investment Research