The Czech koruna has reacted in an excellent way to the positive eco data from Germany. The predictive ability of the German index Ifo has improved during the crisis and it is reasonable to assume that the Czech economy is directly affected by the situation in Germany. Thus the good news from Germany has permitted the Czech koruna to roll down to the closeness of 25.10 EUR/CZK.

The Czech koruna has proved in past to be successfully ignoring the negative developments and on contrary benefit the most from the positive sessions. From a technical point of view thus the strongest values from the year 2009 could be tested – that is, the level of 24.975 EUR/CZK. The Polish zloty was doing extremely well and after the good result of the German Ifo index and domestic retail sales, it has moved under the 4.05 EUR/PLN. The June retail sales have risen an impressive 6.5% y/y. Even though the number is published in nominal value and is deviated up due to the high inflation of food prices, the numbers still point to a rise of real consumption in the second quarter. This week has no important events on the domestic arena. The zloty will behave itself according to the results of the contest between the bears and the bulls on global equity markets. From the technical point of view, it is close to testing the 4.00 EUR/PLN level.

KBC