Czech crown firms to euro, falls to US dollar today

Today´s trading on the forex market was completely uninteresting, said Jan Vejmelek of Komercni banka.

After Thursday´s firming to Kc25.11/EUR, the strongest level since mid-April, the crown´s rate was much more stable today, he noted.

The crown opened at Kc25.18/EUR today and for the whole day stayed in a narrow bracket of 6 hellers - between Kc25.155 and Kc25.215/EUR, Vejmelek said.

Calm on the market signals that Thursday´s swing was the consequence of a larger client order when liquidity was low, he explained.

Vejmelek believes the crown has room for further firming.

"Data from the real economy confirm revival pulled by foreign demand; the result of the elections and the strong centre-right government creates favourable environment for carrying out structural reforms, which should prevent the country from raising its debts. In a one-year horizon, we expect the rate to be around Kc24.50/EUR," Vejmelek added.

However, there is a risk that debt crisis in some European country will escalate or that the euro zone will fall back into recession, he noted.

The US dollar gained to the euro today and at the close traded for $1.2814/EUR.

Author: ČTK
www.ctk.cz