The US military attack on Iraq woke up the Slovak FOREX market from quiet trading on Thursday. The local currency opened the week at 41.70 SKK/EUR (middle) to depreciate to 42.10 SKK/EUR (middle) after London banks started to buy foreign currency and get rid of the Slovak crown. London players behaved similarly on neighboring markets, selling central-European region currencies. Trading on the FOREX market calmed down on Friday, when client orders to sell foreign currencies prevailed over speculative trades throughout the day. The Slovak currency thus strengthened towards the euro and closed the week at 41.87/41.91 SKK/EUR.

Development of the Slovak currency next week is hardly predictable, say market analysts. However, they do not think the crown to move above 42 SKK/EUR. The crown should neither significantly appreciate nor weaken and its exchange rate should range between 41.80 SKK/EUR and 42.150 SKK/EUR. Analysts expect further firming of the local currency after the conclusion of the conflict. The February trade deficit, due to be released late next week, will be the next macroeconomic figure with a potential impact on crown development.

Over the past week, the US dollar strengthened from 1.0784 USD/EUR on Monday to 1.0562 USD/EUR on Friday. The Slovak crown thus oscillated around 39.63/39.67 SKK/USD at the end of the week. The cross exchange rate of the Slovak and Czech crowns was 1.3215/1.3235 SKK/CZK.