The Czech koruna closed little changed
yesterday despite quite interesting
developments on both Hungarian and
Poland FX markets. Although the koruna
opened in a positive territory as the
EUR/CZK broke below the 28.28 resistance
in early trading, the currency was no able to
extend its gains as the Hungarian forint
began to loose. On the hand, the better
sentiment in the Polish FX market
counterbalanced the former negative effect
so the koruna easing was quickly curbed
and the market fell to wait-and-see mode
ahead an upcoming confidence vote.
Today the broadly expected failure of the
rightist government in the confidence vote
should be rather negative message for the
Czech FX market. Also the forthcoming ECB
meeting and political tension in neighbouring
countries could weigh on the Czech koruna.
Nevertheless if the pair fails to break back
through 28.38 EUR/CZK, we might see
further gains of the Czech currency at the
end of the week.
(CSOB - Investment research)