Currencies a touch stronger after weakening on Trump win
WARSAW, Nov 15 (Reuters) -Central Europe's currencies were a touch stronger on Friday with investors repositioning after the dollar strengthened in reaction to Donald Trump's victory in last week's U.S. presidential election.
Emerging market currencies have been under pressure since the election as the dollar strengthened on expectations that Trump's tariff and immigration policies could push up inflation, limiting the scope for U.S. interest rate cuts.
Tariffs could also be a blow to central Europe's more export-dependent economies.
"In our view, the markets are still repositioning after the U.S. election, when the market was generally short in these two CEE currencies (zloty and forint) in particular. But at the same time we see a lag behind EUR/USD sliding lower," ING said in a note.
"The rates market is pricing in new rate cuts but the rate differential is not changing much given the move in core rates. We therefore remain bearish on the CEE region here."
The Hungarian forint EURHUF= was up 0.2% at 405.50 per euro at 0932 GMT, while Poland's zloty EURPLN= rose 0.14% to 4.3180.
Analysts said investors would be watching Friday's retail sales and industrial output data from the U.S. which may influence the dollar later in the day.
"The zloty is strengthening and will again attempt to go down to the level of 4.31 (per euro)," Bank Millennium analysts wrote in a note.
Markets did not react to Polish CPI data published on Friday, which showed annual headline inflation at 5.0% in October, in line with a flash reading.
The Czech crown EURCZK= edged up 0.14% to 25.2640 to the euro.
Some Czech central bank board members viewed a weaker crown exchange rate outlook as an inflationary risk, with vice-Governor Eva Zamrazilova calling it a reason to put the bank's rate-cutting process on hold, minutes from the last policy meeting showed on Friday.
CEE MARKETS | SNAPSHOT | AT 1032 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.2640 | 25.3000 | +0.14% | -2.23% |
Hungary forint | EURHUF= | 405.5000 | 406.2500 | +0.18% | -5.50% |
Polish zloty | EURPLN= | 4.3180 | 4.3240 | +0.14% | +0.61% |
Romanian leu | EURRON= | 4.9769 | 4.9764 | -0.01% | -0.05% |
Serbian dinar | EURRSD= | 116.9400 | 116.9800 | +0.03% | +0.26% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1674.00 | 1669.2000 | +0.29% | +18.39% |
Budapest | .BUX | 77878.58 | 77766.32 | +0.14% | +28.47% |
Warsaw | .WIG20 | 2229.99 | 2247.93 | -0.80% | -4.82% |
Bucharest | .BETI | 17630.98 | 17674.07 | -0.24% | +14.70% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.3770 | -0.0050 | +127bps | -1bps |
5-year | CZ5YT=RR | 3.7500 | 0.0040 | +158bps | -1bps |
10-year | CZ10YT=RR | 3.9840 | -0.0040 | +164bps | -1bps |
Poland | |||||
2-year | PL2YT=RR | 4.9610 | -0.0410 | +285bps | -5bps |
5-year | PL5YT=RR | 5.3570 | -0.0600 | +319bps | -7bps |
10-year | PL10YT=RR | 5.7260 | -0.0490 | +338bps | -5bps |
FORWARD RATE AGREEMENTS | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 3.72 | 3.54 | 3.35 | 3.94 |
Hungary | HUFFRABUBOR= | 6.82 | 6.53 | 6.28 | 6.50 |
Poland | PLNFRAWIBOR= | 5.70 | 5.14 | 4.76 | 5.85 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** | |||||
Reporting by Anna Wlodarczak-Semczuk in Warsaw, Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Gareth Jones
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