FX on track for worst week in November as dollar, geopolitics weigh
By Karol Badohal
WARSAW, Nov 22 (Reuters) -Central Eastern European currencies held steady at weaker levels on Friday, and headed for their worst week in November, as geopolitical tensions hit investor sentiment and the firming dollar added pressure.
Most emerging market stocks and currencies, generally considered as risky, were set for a flat-to-lower week on the back of escalating conflict between Russia and Ukraine.
Adding to this, soft euro zone business activity data led markets to up bets on rate cuts from the European Central Bank (ECB), driving the euro to a two-year low against the dollar, seen by investors as a safe-haven currency. Weaker demand in core European markets is a drag for emerging Europe's exports.
At 1027 GMT, the Polish zloty was flat against the euro at 4.3445.
"The escalation of the conflict in Ukraine makes investors cautious about the PLN," ING BSK analysts said in a note.
They added that recent disappointing Polish economic data, including a slump in construction, was also drag.
"Next week will bring a series of domestic macro data releases. If they indicate a further slowdown in economic conditions, EUR/PLN may head towards 4.38-40."
The zloty hit a nearly five-month low of 4.3835 in early November following Donald Trump's U.S. presidential election victory.
In Hungary, the forint EURHUF=, the region's worst performing currency this year with a 7% fall, hovered around 411.40 per euro, near a 23-month low of 412.50 hit after Trump's re-election.
Elsewhere, the Czech crown EURCZK= trod water at 25.3910, after touching its lowest level since the U.S. election in early trade.
CEE MARKETS | SNAPSHOT | AT 1127 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.3910 | 25.3885 | -0.01% | -2.72% |
Hungary forint | EURHUF= | 411.4000 | 411.2950 | -0.03% | -6.86% |
Polish zloty | EURPLN= | 4.3445 | 4.3445 | +0.00% | +0.00% |
Romanian leu | EURRON= | 4.9758 | 4.9760 | +0.00% | -0.03% |
Serbian dinar | EURRSD= | 116.8800 | 116.9800 | +0.09% | +0.31% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1684.98 | 1691.0900 | -0.36% | +19.16% |
Budapest | .BUX | 79215.37 | 79229.24 | -0.02% | +30.68% |
Warsaw | .WIG20 | 2157.57 | 2178.03 | -0.94% | -7.91% |
Bucharest | .BETI | 17207.01 | 17302.90 | -0.55% | +11.94% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.2990 | -0.0380 | +131bps | +7bps |
5-year | CZ5YT=RR | 3.5690 | -0.1090 | +151bps | -3bps |
10-year | CZ10YT=RR | 3.8960 | -0.0570 | +165bps | +1bps |
Poland | |||||
2-year | PL2YT=RR | 4.8660 | -0.0650 | +287bps | +5bps |
5-year | PL5YT=RR | 5.1440 | -0.0510 | +309bps | +3bps |
10-year | PL10YT=RR | 5.5330 | -0.0430 | +329bps | +2bps |
FORWARD | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 3.72 | 3.49 | 3.35 | 3.91 |
Hungary | HUFFRABUBOR= | 6.89 | 6.57 | 6.30 | 6.50 |
Poland | PLNFRAWIBOR= | 5.65 | 5.05 | 4.62 | 5.85 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** | |||||
Reporting by Karol Badohal in Warsaw and Krisztina Than in Budapest. Editing by Mark Potter
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