The Czech koruna suffered some modest
losses as the correction on the neighbouring
Slovak Forex market also put some
downward pressure on the Czech unit. The
currency ignored a lower-than-expected C/A
deficit (see the News) and focused on a
development in Slovakia. Hence, the
EUR/CZK pair shifted to the 28.5 area, while
this morning is heading to the key 28.585
resistance.
Thus today, should the SKK stay under
pressure, which is our scenario (see the text
about the Slovak FX), the Czech currency
will hardly go against this negative regional
trend. Moreover, risk aversion has increased
in emerging markets recently, so a test of
the 28.58/61 resistance might be under way.
(CSOB - Investment research)