The Slovak koruna was not able to benefit
from forint and zloty gains and its weakening
continued also yesterday when it came close
to the level of 38.50. The market will focus
on the publication of the June inflation today.
Our prediction of 4.8% y/y for the figure is in
line with the market’s consensus, thus we
don’t expect the data to prompt any major
market reaction close to the levels indicated
above. Also, the trade balance for May is to
be published, but regarding this figure we
assume the market reaction to remain mild.
We assume that the trading pattern will not
change until more details of government’s
economic program are known.
The first version of the program is to be made public
next week and Parliament should vote on it
on August 3. We expect the EURSKK pair
trading sideways with upside risk through
38.50 prevailing. However, the central bank
is watching the situation, in our opinion and
is ready to intervene in the event of a more
considerable weakening of the koruna.
(CSOB - Investment research)