The Czech currency weakened on Friday
despite continuous positive development of
other Central European currencies. It moved
sideways without significant impetus for
trading and closed at 28.25 EUR/CZK.
At the beginning of the week the domestic
politics might start to play more significant
role in the markets.
The leader of CSSD
Paroubek proposed a grand coalition
yesterday as a possible political solution. He
said it could perhaps be in power for two
years, until early elections. He would not be
on the cabinet but would be content with
some other constitutional function, he said.
The Chief of ODS Topolánek rejected the
idea, as did Mayor Pavel Bém. Topolánek
said that not even the voters want it.
Paroubek’s proposal came two days after
Klaus said he would not appoint a
government dependent on one vote on one
side or the other. Overall we see the impact
of the weekend politics as slightly positive.
Hence if the positive sentiment in the Central
Europe prevails, the koruna could
strengthen a bit as well today.
(CSOB - Investment research)