Currencies erase some losses, but dollar adds pressure
By Anita Komuves
BUDAPEST, Oct 15 (Reuters) -Central European currencies were a touch stronger versus the euro on Tuesday with Hungary's forint leading gains, although dollar strength kept a lid on gains.
The forint EURHUF= firmed 0.19% on the day to trade at 400.25 per euro, keeping in its recent range as the dollar's strength and European Central Bank rate cut expectations pulled it in different directions, an FX trader in Budapest said.
"The firming of the dollar is not helping, but the market is pricing in an ECB rate cut, and that supports the forint because it will change the rate differential in a way that puts the forint at an advantage, and the two forces balance each other out," the trader said.
The ECB's policy decision is scheduled for Thursday, with markets pricing in a 25-basis-point rate cut.
Hungarian central bank Deputy Governor Barnabas Virag last week flagged a likely pause in the easing of the bank's main interest rate, which remains the European Union's highest alongside Romania's, after an escalation of the conflict in the Middle East and a shift in the U.S. rate outlook pushed the forint to 18-month-lows.
Elsewhere, the Czech crown EURCZK= edged up 0.16% to 25.225 per euro, adding to its gains and pulling away from two-month lows hit earlier this month.
"The Czech koruna received a boost after surprisingly strong current account data yesterday," ING wrote in a note.
"We remain constructive on the slow Polish zloty and CZK gains within the region, although again, a lower EUR/USD does not suggest the possibility of a stronger rally here," they added.
The U.S. dollar was perched near it highest in more than two months against major currencies on Tuesday.
The Polish zloty EURPLN= was a touch stronger against the euro as it traded at 4.292, below the 4.30 psychological level it breached earlier this month.
"We maintain our assessment that fundamentally the złoty looks moderately optimistic in the eyes of foreign investors. However, attempts to strengthen the dollar may be a source of selling pressure," Bank Millennium wrote.
CEE MARKETS | SNAPSHOT | AT 1102 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.2250 | 25.2650 | +0.16% | -2.08% |
Hungary forint | EURHUF= | 400.2500 | 401.0000 | +0.19% | -4.26% |
Polish zloty | EURPLN= | 4.2915 | 4.2940 | +0.06% | +1.23% |
Romanian leu | EURRON= | 4.9751 | 4.9747 | -0.01% | -0.02% |
Serbian dinar | EURRSD= | 116.9600 | 117.0300 | +0.06% | +0.24% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1600.87 | 1600.1600 | +0.04% | +13.21% |
Budapest | .BUX | 74192.31 | 74428.10 | -0.32% | +22.39% |
Warsaw | .WIG20 | 2319.61 | 2327.50 | -0.34% | -1.00% |
Bucharest | .BETI | 17569.86 | 17593.76 | -0.14% | +14.30% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.3470 | -0.0200 | +112bps | +2bps |
5-year | CZ5YT=RR | 3.6620 | -0.0230 | +156bps | +2bps |
10-year | CZ10YT=RR | 3.9370 | -0.0390 | +170bps | +0bps |
Poland | |||||
2-year | PL2YT=RR | 4.9060 | -0.0390 | +268bps | +0bps |
5-year | PL5YT=RR | 5.2270 | -0.0830 | +313bps | -5bps |
10-year | PL10YT=RR | 5.4790 | -0.1430 | +324bps | -11bps |
FORWARD RATE AGREEMENTS | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 3.81 | 3.55 | 3.41 | 4.15 |
Hungary | HUFFRABUBOR= | 6.66 | 6.38 | 6.15 | 6.34 |
Poland | PLNFRAWIBOR= | 5.77 | 5.45 | 4.97 | 5.86 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** | |||||
Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Mark Potter
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