The developments on the Slovak FX
market start to be ‘boring’: a new day, a new
record! The Slovak koruna once more broke
to a new all time high against the euro on
Thursday. The currency is boosted by the
demand of foreign investors who continue to
pour money into the central European
assets. Yesterday, EUR/SKK hit the 36.255-
threshold. The bullish sentiment is still
present in the market and has been in place
for almost the whole month now. Koruna
gained 3% (!) during October on a
combination of improved sentiment, the
state budget approval and a rating upgrade.
The pair did retreat slightly to EUR/SKK
36.455 till the end of the session but we
think the bulls will return back today.
Therefore, we expect further
strengthening this morning with some
potential profit taking orders in the
afternoon. However, it seems that the bulls
will not be satisfied till the EUR/SKK 36.00
level is hit. We do not expect that the PPI
release will affect the market. But the NBS
meeting scheduled for next Tuesday will be
in the centre of attention. The possibility of a
rate hike could continue to boost demand for
SKK.
(CSOB - Investment research)