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Forint gains ground, zloty firm as Polish rates on hold



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-Forint gains ground, zloty firm as Polish rates on hold</title></head><body>

PRAGUE, July 4 (Reuters) -The zloty held firm on the strong side of 4.30 to the euro on Thursday with markets expecting further confirmation that Polish interest rates are unlikely to be cut this year, while a softer dollar gave some respite to central Europe's currencies.

Hungary's forint led the gains, rising for a second straight session, while the Czech crown steadied after a fall earlier this week.

Weaker U.S. data raised the odds of a September interest rate by the Federal Reserve, weighing on the dollar, which gave some support to central European assets.

The National Bank of Poland (NBP) left interest rates on hold for a ninth straight month on Wednesday - after slight easing of policy last year - keeping the main rate at 5.75% in anticipation of an acceleration in inflation in the months ahead.

Polish Governor Adam Glapinski is due to address a news conference later on Thursday, with expectations he will repeat that the chance of a rate cut this year is small.

"We expect that not much will change here and we will hear confirmation that rate cuts are unlikely this year," ING said in a note.

"If the NBP delivers a traditional hawkish message, PLN should benefit the most. EUR/PLN already fell below 4.300 yesterday as we expected, and some paying flow in the rates market could support EUR/PLN towards 4.28."

The zloty EURPLN= traded at 4.2965, down less than 0.1% on the day.

The forint EURHUF=, which has struggled to get some distance from the psychological 400 per euro level it weakened to in the past month, added 0.3% to 393.50 to the euro.

"We expect a calm day today, with the U.S. markets closed for holiday. The forint will firm a little bit lacking news, but we are eyeing tomorrow's retail and industry output and trade balance data," a local trader said.

Elsewhere, the crown EURCZK= inched 0.1% lower to 25.161 per euro and was off a low of 25.21 hit this week, while Romania's leu EURRON= was steady at 4.9771 to the euro.



CEE MARKETS

SNAPSHOT

AT 1124 CET






CURRENCIES







Latest

Previous

Daily

Change




trade

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

25.1610

25.1460

-0.06%

-1.83%

EURHUF=

Hungary forint

EURHUF=

393.5500

394.6500

+0.28%

-2.63%

EURPLN=

Polish zloty

EURPLN=

4.2965

4.2935

-0.07%

+1.12%

EURRON=

Romanian leu

EURRON=

4.9771

4.9769

-0.00%

-0.06%

EURRSD=

Serbian dinar

EURRSD=

117.0100

117.0500

+0.03%

+0.20%


Note: daily change

calculated from



1800 CET












Latest

Previous

Daily

Change





close

change

in 2024

.PX

Prague

.PX

1570.23

1567.2200

+0.19%

+11.05%

.BUX

Budapest

.BUX

71847.27

71738.76

+0.15%

+18.52%

.WIG20

Warsaw

.WIG20

2538.08

2543.64

-0.22%

+8.33%

.BETI

Bucharest

.BETI

18262.58

18257.20

+0.03%

+18.81%













Spread

Daily






vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

3.9600

-0.0280

+103bps

-4bps

CZ5YT=RR

5-year

CZ5YT=RR

3.9530

-0.0280

+137bps

-5bps

CZ10YT=RR

10-year

CZ10YT=RR

4.1430

-0.0270

+157bps

-5bps


Poland






PL2YT=RR

2-year

PL2YT=RR

5.2120

0.0930

+228bps

+8bps

PL5YT=RR

5-year

PL5YT=RR

5.6220

-0.0110

+304bps

-3bps

PL10YT=RR

10-year

PL10YT=RR

5.7730

-0.0060

+320bps

-3bps










FORWARD RATE AGREEMENTS







3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

4.32

4.08

3.88

4.69


Hungary

HUFFRABUBOR=

7.12

6.89

6.61

6.88


Poland

PLNFRAWIBOR=

5.79

5.75

5.49

5.85


Note: FRA quotes

are for ask prices






**************************************************************














Reporting by Jason Hovet in Prague, Boldizsar Gyori in Budapest and Anna Wlodarczak-Semczuk in Warsaw; Editing by Mrigank Dhaniwala

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