The Czech koruna opened and closed
nearly at the same level yesterday (27.92
EUR/CZK). Some slight weakening during
the morning session was erased in the
afternoon. The koruna still ignores present
never-ending discussions about new
Czech government and remains only
sensitive to the regional sentiment. Even a
negative IMF's report criticizing the Czech
government budget and reluctance on
reforms didn’t touch the koruna.
Today, the economic calendar is empty
with the exception of new 3y bond
issuance. We expect the koruna will
continue to ignore the political instability
and in the short term it can slightly firm
again. As such, the Czech currency can
fluctuate within the range of 27.85-28.00
EUR/CZK today but it should get back
above 28 EUR/CZK again in a one-month
period.
(CSOB - Investment research)