The Czech koruna slightly eased at the end
of yesterday’s session, but it is hard to find
any reason behind the price action. So, the
EUR/CZK pair closed at the 28.25 level, not
very far from the important resistance
coming in at 28.29.
Today, the koruna will probably watch the
Polish zloty as the calendar in Poland is
really busy. We do not expect EUR/CZK to
react to a comment of ODS’s candidate for
finance Vlastimil Tlustý. He said that an
ODS-led minority government will propose a
budget deficit of over CZK 100 bn. This
should be slightly higher than the deficit
proposed by the leaving cabinet, which
expected the deficit at CZK 88 bn. The
difference comes form the fact that ODS
doesn’t want to include the revenue from
privatization sales that have not yet been
approved into budget revenues. Moreover, a
few days ago ODS leader Topolanek said
that his (transitory) government will not
make any decisions on privatizations ahead
of early elections.
(CSOB - Investment research)