The Czech koruna ignored continuous
debates on the Czech budget at the
beginning of the week. Finally the
government approved the initial draft with a
deficit of 91 billions CZK, already including
revenues from partial privatization of the
energetic Giant CEZ (31 billions for about
7% share). The FX market was nevertheless
under the influence of the varying mood
towards Central European markets. Hence
the koruna stayed within a range 28.40-
28.50 during most of the yesterday’s
session.
Today the regional mood might improve as
global yields continue to fall and stocks have
finally recovered from recent falls. As a
result appetite of global investors for the
investments in more risky emerging markets
including the Czech FX could increase.
(CSOB - Investment research)