The EUR/CZK pair tested the key resistance
standing the 28.385 level as the forint
recovery improved regional sentiment.
However, on the other hand it was the
easing Slovak koruna, which reversed the
trend in the Czech forex market (so the
attack on the mentioned resistance failed)
and EUR/CZK actually finished the session
very close to opening levels.
Hence as usual external markets played
more important role than domestic news,
which included CNB Minutes (for more see
the fixed income part) and news from a
deeply divided political scene. In this respect
it is worth adding that the post-election
deadlock has been prevailing as leaders of
the main parties (conservative ODS and
Soc-Dem) have continued to reject any
proposal made by their political opponents.
The end of this week could hopefully bring
some progress as President Klaus promised
to step in to post-election negotiations.
Today a release of the June inflation figures
came in line with market consensus (2.8%
y/y) thus the koruna should not be
influenced by this information and decisive
will remain development in emerging
markets.
(CSOB - Investment research)