Zloty firms, forint, crown weighed as fear of a US recession dissipates
BUDAPEST, Aug 16 (Reuters) -Central European currencies traded sideways on Friday, with the zloty leading with gains coming back from a banking holiday and the forint and crown weakening slightly.
Emerging market currencies were weighed down by a U.S. retail sales data published on Thursday coming in above expectations, curtailing fears of a hard landing of the U.S. economy and the possibility of an aggressive Federal Reserve easing coming next month, strengthening the dollar to the euro.
The Polish zloty EURPLN= traded at 4.28 to the common currency, firming 0.1% returning from a market holiday by 0756 GMT.
"The złoty has returned to its "favourite" fluctuation range in recent months, i.e. 4.24 - 4.30, from which it was mainly pushed upwards by global increases in risk aversion," Bank Millennium said in a note.
Analysts expect the currency to further strengthen in the coming weeks as investors try to gauge the timing of the resuming of Polish monetary easing as well as the next move of other central banks.
"The market is aggressively pricing in interest rate cuts in Poland... their potential cancellation would create room for the złoty to strengthen. All the more so if the largest central banks, i.e. the Fed and the European Central Bank, begin or continue to ease monetary policy," Bank Millennium said.
In July, the central bank left its main interest rate on hold at 5.75% for a ninth straight month, as expected. The Monetary Policy Council meeting on interest rates will be held on Sept. 3-4.
Polish central banker Iwona Duda said earlier this year that a discussion on interest rate cuts could start only in the second half of next year.
Elsewhere in the region currencies weakened, with the Hungarian forint EURHUF= trading slightly below its opening price and the Czech crown EURCZK= trading at 25.26 to the main currency, down by 0.15%.
CEE MARKETS | SNAPSHOT | AT 0956 CET | ||||
CURRENCIES | ||||||
Latest | Previous | Daily | Change | |||
trade | close | change | in 2024 | |||
EURCZK= | Czech crown | EURCZK= | 25.2650 | 25.2260 | -0.15% | -2.23% |
EURHUF= | Hungary forint | EURHUF= | 395.8000 | 395.7000 | -0.03% | -3.19% |
EURPLN= | Polish zloty | EURPLN= | 4.2800 | 4.2850 | +0.12% | +1.51% |
EURRON= | Romanian leu | EURRON= | NULL | 4.9750 | #VALUE! | #VALUE! |
EURRSD= | Serbian dinar | EURRSD= | 116.9200 | 117.0200 | +0.09% | +0.28% |
Note: daily change | calculated from | 1800 CET | ||||
Latest | Previous | Daily | Change | |||
close | change | in 2024 | ||||
.PX | Prague | .PX | 1577.32 | 1572.1900 | +0.33% | +11.55% |
.BUX | Budapest | .BUX | 72318.22 | 71673.12 | +0.90% | +19.30% |
.WIG20 | Warsaw | .WIG20 | 2389.72 | 2344.14 | +1.94% | +1.99% |
.BETI | Bucharest | .BETI | 18102.39 | 18019.21 | +0.46% | +17.77% |
Spread | Daily | |||||
vs Bund | change in | |||||
Czech Republic | spread | |||||
CZ2YT=RR | 2-year | CZ2YT=RR | 3.4210 | -0.0040 | +097bps | +0bps |
CZ5YT=RR | 5-year | CZ5YT=RR | 3.4630 | -0.0130 | +128bps | -1bps |
CZ10YT=RR | 10-year | CZ10YT=RR | 3.7020 | -0.0110 | +145bps | +0bps |
Poland | ||||||
PL2YT=RR | 2-year | PL2YT=RR | 4.8820 | 0.0550 | +243bps | +6bps |
PL5YT=RR | 5-year | PL5YT=RR | 5.0380 | 0.0560 | +285bps | +6bps |
PL10YT=RR | 10-year | PL10YT=RR | 5.2660 | 0.0560 | +302bps | +7bps |
FORWARD RATE AGREEMENTS | ||||||
3x6 | 6x9 | 9x12 | 3M interbank | |||
Czech Rep | CZKFRAPRIBOR= | 3.88 | 3.50 | 3.24 | 4.41 | |
Hungary | HUFFRABUBOR= | 6.70 | 6.22 | 5.80 | 6.54 | |
Poland | PLNFRAWIBOR= | 5.71 | 5.40 | 4.97 | 5.86 | |
Note: FRA quotes | are for ask prices | |||||
************************************************************** | ||||||
Reporting by Boldizsar Gyori in Budapest, and Pawel Florkiewicz in Warsaw; Editing by Emelia Sithole-Matarise and Mrigank Dhaniwala
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