The Czech koruna slightly eased at the end of yesterday’s session

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)