The Czech currency fell slightly to 28.20 CZK/EUR following the general regional trend. The forint eased close to the 280.00 HUF/EUR level. The US dollar was badly hurt by Ifo index in the morning when slipped to daily minimum of 1.2846 USD/EUR. However, the afternoon’s US macro-data helped it a bit to get back below 1.2800 level. The CZK thus closes at 22.04 CZK/USD.
We feel that investors are becoming nervous as the Communists may play a bigger role in domestic politics. The CSSD closed negotiations with the ODS and started quite new talks with two small rightest parties – the Christian democrats and the Greens. Miroslav Kalousek of the KDU-CSL surprisingly admitted a kind of cooperation with the Communists. This could be viewed as a negative for the koruna if confirmed in the next days.
We expect the koruna staying in 28.00-28.30 CZK/EUR range tomorrow.