For the Slovak koruna, a new day is a new
all-time high. This could be a slogan to
describe the Slovak koruna developments in
these days. The currency broke through the
important psychological level of EUR/SKK
35.0 hitting 34.87 boosted by positive
regional sentiment. There were also rumours
that option barriers were set at this level. On
the other hand, the koruna ignored the
approval of 2007 state budget. The public
finance deficit is set at 2.9% of GDP and
opens the way to euro adoption in 2009.
Today, the economic calendar contains the
October retail sales and wages, but these
are no real market movers. The koruna will
mainly follow regional sentiment. If it remains
positive, we will likely see further koruna
gains. Today morning, the quotations on the
market are already lower than yesterday’s
record. For the time being, nothing seems to
be able to reverse this underlying koruna
trend.
The central bank shows no signs of
concern over the recent appreciation so
far. But as we mentioned yesterday, there
will be a point when the NBS will verbal
intervene on the market and we expect it
to be around the level of EUR/SKK 34.6.
ČSOB - investment research