The Czech koruna fell against the euro as the traders expect the government to weaken the currency to protect the nation’s exports and prevent the deflation. Against the greenback the koruna fluctuates between gains and losses after its slumped and then returned to the opening level earlier.
The Czech Koruna jumped today after the parliamentary election gave most votes to the parties determined to cut the budget spending, removing the concerns of the market participants that the election will be won by the parties intending to increase the social spending.
The Czech koruna advanced to a one week high versus the euro after a positive industrial report that fueled speculations that one of the most affected European economies is emerging for the hardest crisis since the end of communism in Czech Republic.
After two other European central banks decided to hold their current interest rates, Czech and Polish banks chose to follow the same way and didn’t change their reference interest rates despite the fact that they both raised the rates at the end of November.
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