Czech Koruna At 1-1/2 Month High Against US Dollar

The Czech koruna stabilized after hitting a fresh 1-1/2 month high against the US dollar on Monday following the Czech Statistical Office announced that the nation's consumer price index declined for the first time since August 2003.

The CPI dropped 0.2% year-on-year in October, after a flat reading in the previous month. Economists expected a decline of 0.1%.

On a monthly basis, the CPI decreased 0.2% in October, compared with a 0.4% fall in the previous month. Economists were looking for a decrease of 0.1%.

At the same time, the unemployment rate in the Czech Republic decreased slightly to 8.5% in October from 8.6% in September, the Ministry of Labor and Social Affairs reported today. Economists had expected the unemployment rate to remain unchanged at 8.6%.

The koruna that closed last week's trading at 17.334 against the greenback advanced 1.7 percent to 17.043 around 3:00 am ET. This set the highest mark for the domestic unit since September 24. The dollar-koruna pair then moved on holding pattern and is currently quoted at 17.10. A rise above the 16.896 resistance may push the domestic unit to its highest level in more than 13 months.