Given the uncertainty ahead Friday’s release
of the July US payrolls, the EUR/CZK pair
edged higher and tested the key resistance
coming in at 28.29. As the payrolls came out
very close to the market consensus, the
EUR/CZK dipped back to its favourite area
close to the 28.25 level.
President Klaus should swear in the new
ODS-led minority government but the market
will continue to shrugged-off the domestic
politics and it will focus on July’s trade
balance statistics. As expected, the July
trade balance showed a small deficit (CZK
1.22 bn), but the trends in foreign trade
haven’t changed: the surplus in automotive
balance increased, while imports were
elevated given the ongoing deterioration in
terms of trade due to high oil prices.
Nevertheless, since the figure is close to the
market consensus, the market response
should be neutral.
(CSOB - Investment research)