The failure in the confidence vote for the
new rightist government did not have major
impact on the Czech FX market. Although
the Czech koruna weakened in the morning,
the attention finally turned towards the
positive developments on emerging markets.
Hence it stayed under key technical barrier
at 28.30 EUR/CZK and started to track the
gains of the Polish zloty.
Today the most important event should be
the ECB rate decision meeting and even
more the following press conference of J. C.
Trichet. Under normal circumstances the
koruna could get under modest pressure,
nevertheless current bullish sentiment on
emerging markets should hardly be
threatened by ECB as we do not expect
major surprises. Hence we rather bet on
stronger koruna at the end of today’s
session. The key technical barrier stands at
28.18 EUR/CZK, if it is broken we will move
towards 28.105 levels.
(CSOB - Investment research)