Bad sentiment towards emerging markets triggered by riots in Hungary and coup in Thailand kept the Czech koruna under pressure

Bad sentiment towards emerging markets triggered by riots in Hungary and coup in Thailand kept the Czech koruna under pressure. During major part of the yesterday’s session it moved sideways in a tight range around 28.50 EUR/CZK. On the other hand it still managed to trim part of the losses towards other Central European currencies from previous sessions.

We do not expect any significant improvement in the sentiment on the Czech FX market today. The political tension in Hungary should prevail at least till Thursday and emerging markets should globally stay under pressure due to Thailand. On the other hand falling yields on global markets should prevent the koruna from further losses.

(CSOB - Investment research)