Bloomberg News

Czech Koruna Gains, Erases January Loss on European Bond Sales

January 12, 2012

Jan. 12 (Bloomberg) -- The koruna strengthened, erasing this month’s loss against the euro, and Czech stocks rallied after Spain and Hungary sold more debt than planned, fueling optimism that the European Union’s debt crisis is easing.

The Czech currency appreciated as much as 1.4 percent, the most since Dec. 30, and traded 1 percent up at 25.587 per euro by 5:08 p.m. in Prague. Poland’s zloty and the Hungarian forint also traded at least 1 percent stronger against the euro.

“Currencies in our region had a very positive afternoon, mainly because of surprisingly successful auctions of bonds in Spain and Treasury bills in Italy,” Marek Drimal, an economist at Komercni Banka AS in Prague, wrote in an e-mail to clients.

The euro recovered against other currencies as European Central Bank President Mario Draghi said he saw signs of stabilization in the region. European stocks reversed earlier gains after U.S. reports showing that retail sales and initial jobless claims in the world’s largest economy missed economists’ forecasts.

The Czech Republic’s PX equity gauge climbed 0.8 percent at its close of trading, led by a 2.6 percent gain for Austria’s Erste Group Bank AG. The benchmark, where Erste has a 17 percent weighting, pared an earlier advance of as much as 1.3 percent.

--Editors: Peter Branton, Gavin Serkin

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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