Forint underperforms peers, falls to new lows versus zloty
By Anita Komuves
BUDAPEST, Nov 27 (Reuters) -The forint eased versus the euro and fell to a historic low versus the Polish zloty on Wednesday as investors turned away from the Hungarian currency amid uncertainty over a leadership change at the central bank and the country's economic outlook.
The zloty and the crown held stable versus the euro as investors eyed U.S. inflation data due to be published later in the day, which could provide clues on the likely scale of a Federal Reserve interest rate cut expected next month and thus could move currency markets, traders and analysts said.
The forint EURHUF= was down 0.2% versus the euro and trading at 411.5, staying within its recent tight range between 409 and 412. The currency, the region's worst performer in 2024 as it has lost nearly 7%, plunged to a new historic low versus the zloty at 95.48.
"The mood has been a bit better in global markets in the past few days, and the zloty can benefit from it, while the forint cannot," an FX trader in Budapest said.
"Investors just turned away from the forint. There is interest in emerging currencies, but investors turn to the zloty and the crown instead of the forint because there is just too much uncertainty here. Public messaging about central bank rates is not helping, either," she said.
The central bank left its base rate at 6.5% last week as the forint plunged to near two-year lows pressured by the victory of Donald Trump at the U.S. presidential election, as the prospect of trade tariffs boosted the dollar.
Economy Minister Marton Nagy said on Tuesday the new central bank governor, who will take over from Gyorgy Matolcsy at the helm of the bank in early March, will have strong relations with the new economy minister, and hopefully the 6.5% base rate can decrease next year. The change will come at a time when a weak forint threatens to fuel inflation risks, and the economy is barely growing.
The zloty EURPLN= was unmoved, trading at 4.309. The currency gained 0.8% so far this year, outperforming regional peers.
Better-than-expected economic data, Poland's stable interest rates and European Union funds flowing to the country were propping up the zloty in the face of pressure from the firming dollar, traders and analysts have said.
The euro's weakness on the international stage also contributed to the strength of the zloty, Bank Millennium wrote in a client note.
The Czech crown EURCZK= was also stable, trading at 25.273 to the euro.
CEE MARKETS | SNAPSHOT | AT 1133 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.2730 | 25.2735 | +0.00% | -2.26% |
Hungary forint | EURHUF= | 411.5000 | 410.5150 | -0.24% | -6.88% |
Polish zloty | EURPLN= | 4.3090 | 4.3091 | +0.00% | +0.82% |
Romanian leu | EURRON= | 4.9765 | 4.9768 | +0.01% | -0.04% |
Serbian dinar | EURRSD= | 116.8800 | 117.0000 | +0.10% | +0.31% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1688.84 | 1694.7100 | -0.35% | +19.44% |
Budapest | .BUX | 79687.22 | 80056.08 | -0.46% | +31.45% |
Warsaw | .WIG20 | 2186.62 | 2199.85 | -0.60% | -6.67% |
Bucharest | .BETI | 16993.64 | 16985.64 | +0.05% | +10.56% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.2910 | -0.0050 | +127bps | +1bps |
5-year | CZ5YT=RR | 3.6130 | -0.0010 | +160bps | +3bps |
10-year | CZ10YT=RR | 3.9080 | 0.0110 | +175bps | +5bps |
Poland | |||||
2-year | PL2YT=RR | 4.8620 | -0.0410 | +284bps | -3bps |
5-year | PL5YT=RR | 5.1980 | -0.0720 | +319bps | -4bps |
10-year | PL10YT=RR | 5.6010 | -0.0520 | +344bps | -1bps |
FORWARD | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 3.74 | 3.51 | 3.32 | 3.89 |
Hungary | HUFFRABUBOR= | 6.89 | 6.48 | 6.16 | 6.50 |
Poland | PLNFRAWIBOR= | 5.70 | 5.14 | 4.73 | 5.85 |
Note: FRA quotes | are for ask prices | ||||
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Reporting by Anita Komuves and Krisztina Than in Budapest, Pawel Florkiewicz and Alan Charlish in Warsaw; Editing by Shreya Biswas
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