Tuesday's trading in the Slovak koruna was
mostly quiet, influenced by the region. The
local currency strengthened early in the
morning to EUR/SKK 38.470. But this level
was attractive enough for local importers
that decided to buy foreign currency. Koruna
retreated later in the day in line with the
development elsewhere in the region and
ended near the EUR/SKK 38.600 threshold.
The press conference after coalition board
did not bring any new information. PM Fico
confirmed his commitment to euro adoption
in 2009 and to the principles of the Stability
and growth pact. However, the devil is in the
detail. Therefore, we are cautious and
recommend waiting till the official
government manifesto is approved.
The vote on the manifesto should take place at the
beginning of August. Today, economic
calendar is empty and all eyes are on the
U.S. CPI release and Bernanke testimony.
We see more risk for SKK weakening for
today. However, NBS should be still stay on
the offer (selling euros).
(CSOB - Investment research)