The Slovak koruna booked new record highs on Tuesday

The Slovak koruna booked new record highs on Tuesday. It went through the EUR/SKK 35.50 level supported by the bullish sentiment in the region. The unit touched the EUR/SKK 35.495 and retreated slightly back to EUR/SKK 35.530 in the afternoon. Forex trading was inspired by the comments of Slovak Deputy Finance Minister Frantisek Palko who said that strong GDP growth could push the public finance deficit to around 2.5 percent of GDP in 2006. Slovakia recorded record strong economic growth in the Q3 2006 of 9.8 percent supported by the foreign demand and investment activity.

Today, the market could try to push the EUR/SKK lower again maybe towards the new all time high. We also look closely to comments of ECB Liebscher, who will speak in Bratislava about Slovakia: From Slovak crown to the euro. A positive assessment would stimulate market thinking on the chances of the country to enter the euro area in 2009.

(CSOB - Investment research)