Geopolitical tensions and firm dollar hurt FX
WARSAW, Nov 21 (Reuters) -Central Eastern European currencies weakened on Thursday as mounting geopolitical tensions increased risk aversion among investors, with a stronger U.S. dollar adding to the pressure.
Russia launched an intercontinental ballistic missile during an attack on Ukraine on Thursday, Kyiv's air force said, following Ukraine's use of Western missiles to strike Russia in recent days.
Also on Thursday, Russia said a new U.S. ballistic missile defence base in northern Poland would lead to an increase in the overall level of nuclear danger, with Warsaw saying "threats" from Moscow only strengthened the argument for NATO defences.
At 1113 GMT, the Polish zloty EURPLN= was down 0.3% against the euro at 4.3480, near its weakest levels in over a week.
"We have some risk aversion. I have an impression that these geopolitics, we're hearing about them a bit recently and it all is translating negatively ... not just in Poland but wider," a Warsaw-based trader said.
The trader also pointed to gloomy 2025 forecasts for the European Union, including its emerging markets, following the U.S. re-election of Donald Trump, whose pledges to impose tariffs, if they materialise, would hurt the bloc's main economies.
"From all this euro-dollar, which is close to 1.05 or very important support levels ... this also puts pressure on emerging markets and the zloty as well," the trader said.
Poland's finance ministry on Thursday sold bonds worth 8 billion zlotys ($1.9 billion) amid demand nearly double that figure. It also raised a record 97.1 billion yen ($628.4 million) in Samurai bonds.
Hungary's forint EURHUF= weakened 0.4% to 411.60 per euro, nearing the 22-month low of 412.50 hit earlier this month.
News from the Ukraine-Russia war still dominate market sentiment, weighing on riskier currencies, a Budapest trader said.
The Czech crown EURCZK= also slipped against the euro, trading 0.2% lower at 25.3380.
"From the perspective of domestic and also foreign fundamentals, the crown market still lacks significant impulses that would take the currency out of the 25.20-25.40 EUR/CZK band, where it has been trading since the end of September," Czech lender CSOB said.
CEE MARKETS | SNAPSHOT | AT 1213 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.3380 | 25.2945 | -0.17% | -2.51% |
Hungary forint | EURHUF= | 411.6000 | 409.7850 | -0.44% | -6.90% |
Polish zloty | EURPLN= | 4.3480 | 4.3352 | -0.29% | -0.08% |
Romanian leu | EURRON= | 4.9765 | 4.9760 | -0.01% | -0.04% |
Serbian dinar | EURRSD= | 116.9300 | 116.9800 | +0.04% | +0.27% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1684.30 | 1688.2300 | -0.23% | +19.11% |
Budapest | .BUX | 79032.80 | 79096.82 | -0.08% | +30.37% |
Warsaw | .WIG20 | 2152.19 | 2144.68 | +0.35% | -8.14% |
Bucharest | .BETI | 17235.95 | 17194.06 | +0.24% | +12.13% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.3290 | -0.0240 | +124bps | +1bps |
5-year | CZ5YT=RR | 3.6780 | -0.0150 | +154bps | +2bps |
10-year | CZ10YT=RR | 3.9650 | -0.0300 | +165bps | +0bps |
Poland | |||||
2-year | PL2YT=RR | 4.9250 | -0.0090 | +283bps | +3bps |
5-year | PL5YT=RR | 5.2180 | -0.0290 | +308bps | +0bps |
10-year | PL10YT=RR | 5.6130 | -0.0160 | +330bps | +1bps |
FORWARD | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 3.72 | 3.52 | 3.41 | 3.92 |
Hungary | HUFFRABUBOR= | 6.91 | 6.59 | 5.91 | 6.50 |
Poland | PLNFRAWIBOR= | 5.66 | 5.05 | 4.62 | 5.85 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** |
($1 = 4.1304 zlotys)
($1 = 154.5300 yen)
Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Tasim Zahid and Mark Potter
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