The Estonian currency rallied against the US dollar on Tuesday morning in New York and touched a 4-day high of 11.7299 by 9:00 am ET. The Estonian kroon thus reversed direction against the buck from yesterday's 11-day low and the next resistance level is seen around the 11.44 level.
The Estonian kroon is pegged to the European single currency since January 1, 1999. The reference rate for the euro-kroon pair is at 15.6466.
The kroon gained despite the Estonian Finance Ministry report showed that the Estonian economy is expected to contract 8.5% this year. This was much weaker than the 3.5% decline estimated earlier.
In February, the Bank of Estonia estimated real economy to decline 5.5% this year. The central bank expects economic growth and external demand to start recovery in 2010.
According to Finance Minister, Ivari Padar the possibilities of joining euro and budget policy in longer term have to be reviewed in the light of new forecast.
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