Hungary's forint firms; zloty, crown subdued
By Boldizsar Gyori
BUDAPEST, July 17 (Reuters) - Hungary's forint outperformed its regional peers on Wednesday, trading near a 6-week high versus the euro hit earlier in the week, while the crown and the zloty were subdued.
The forint EURHUF= was up 0.36%, trading at 390.95 versus the common currency.
A relative calm on the global stage and a weakening dollar helped the forint to firm, a Budapest-based FX trader said.
"Holiday mood kicked in, which adds to a high rate difference that creates an environment for the forint to firm," he said.
The National Bank of Hungary reduced its base rate to 7% last month as expected, and has now cut borrowing costs by 1,100 basis points since May 2023.
Its Deputy Governor said earlier this week that a possible further small reduction in the base rate is an "open question" during next Tuesday's policy meeting.
A high interest rate differential gave a backing to the forint, allowing investors to carry-trade.
Meanwhile, the Polish zloty EURPLN= traded at 4.29 to the euro, down 0.15% on the day.
"The current EUR/PLN level again seems favorable for purchasing our currency, especially with the relatively high EUR/USD," ING BSK said in a note.
"The fundamentals behind the zloty remain unchanged, such as the strong current account balance of payments and the high level of NBP rates, as well as the lack of readiness to change them despite the upcoming Fed and ECB cuts."
Recent comments by Federal Reserve Chair Jerome Powell indicated that interest rate cuts may not be far off, with expectations of a September start. FEDWATCH
The European Central Bank holds its policy meeting on Thursday, but is not expected to adjust policy before September, analysts said.
The Czech crown EURCZK= traded at 25.32, trading sideways.
CEE MARKETS SNAPSHOT AT 1036 CET | ||||||
CURRENCIES | ||||||
Latest trade | Previous close | Daily change | Change in 2024 | |||
EURCZK= | Czech crown | EURCZK= | 25.3250 | 25.3330 | +0.03% | -2.46% |
EURHUF= | Hungary forint | EURHUF= | 390.9500 | 392.3500 | +0.36% | -1.99% |
EURPLN= | Polish zloty | EURPLN= | 4.2915 | 4.2850 | -0.15% | +1.23% |
EURRON= | Romanian leu | EURRON= | 4.9705 | 4.9699 | -0.01% | +0.08% |
EURRSD= | Serbian dinar | EURRSD= | 116.9200 | 117.0200 | +0.09% | +0.28% |
Note: daily change calculated from 1800 CET | ||||||
Latest | Previous close | Daily change | Change in 2024 | |||
.PX | Prague | .PX | 1598.78 | 1596.1100 | +0.17% | +13.07% |
.BUX | Budapest | .BUX | 72432.52 | 72294.66 | +0.19% | +19.49% |
.WIG20 | Warsaw | .WIG20 | 2443.61 | 2485.93 | -1.70% | +4.29% |
.BETI | Bucharest | .BETI | 18551.43 | 18577.54 | -0.14% | +20.69% |
Spread vs Bund | Daily change in spread | |||||
Czech Republic | ||||||
CZ2YT=RR | 2-year | CZ2YT=RR | 3.5980 | -0.0100 | +084bps | +0bps |
CZ5YT=RR | 5-year | CZ5YT=RR | 3.6830 | -0.0080 | +129bps | +1bps |
CZ10YT=RR | 10-year | CZ10YT=RR | 3.8130 | -0.0110 | +140bps | +1bps |
Poland | ||||||
PL2YT=RR | 2-year | PL2YT=RR | 5.0070 | -0.0270 | +225bps | -2bps |
PL5YT=RR | 5-year | PL5YT=RR | 5.3510 | -0.0980 | +296bps | -8bps |
PL10YT=RR | 10-year | PL10YT=RR | 5.4890 | -0.0750 | +307bps | -6bps |
FORWARD RATE AGREEMENTS | ||||||
3x6 | 6x9 | 9x12 | 3M interbank | |||
Czech Rep | CZKFRAPRIBOR= | 4.13 | 3.73 | 3.54 | 4.61 | |
Hungary | HUFFRABUBOR= | 6.85 | 6.52 | 6.20 | 6.83 | |
Poland | PLNFRAWIBOR= | 5.80 | 5.67 | 5.32 | 5.86 | |
Note: FRA quotes are for ask prices | ||||||
**************************************************** | ||||||
Reporting by Boldizsar Gyori in Budapest; editing by Christina Fincher and Varun H K
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