The same story about koruna all this week: Rate CZK/EUR locked at 28,00 with marginal volatility, no important news and waiting for ECB and the Czech data at the end of the week. Today, Czech trade balance was released, the surplus was in line with expectations and therefore the event was neutral for the market. Other currencies in the CE region didn´t show a clear direction and couldn´t really influence the CZK.
Tomorrow, ECB is set to raise interest rates by 25 bps. This is a widely expected outcome, but still, widening of the rate differencial between EMU and the CR may cause some pressure on the Czech currency. The impact will be stronger if another ECB rate hike in 1Q 2007 is indicated by Mr. Trichet.
The US dollar, consolidating at 1,3300 level, tried to correct previous losses. There isn´t however an important catalyst on the market, so the rate reversed and now the pair USD/EUR trades again above 1,3300. The koruna firmed slightly against the dollar and closed at 21,03.