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Forint hovers at 18-month low as FX looks to reverse losses



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PRAGUE, Oct 7 (Reuters) -The Hungarian forint hovered at an 18-month low on Monday, the Czech crown sat off a two-month low and the Polish zloty eased for a ninth consecutive session, as dollar strength stayed a drag on central Europe's currencies.

The region has been impacted in the past week by Middle East tensions cutting into risk appetite. On Friday, a U.S. jobs report pointed to a resilient economy and spurred markets to reduce bets of outsized Federal Reserve rate cuts, leaving central Europe once again under pressure from the dollar on Monday.

The crown and forint have been the hardest hit, losing more than 2% and 1%, respectively, in the past two weeks, in the wake of extended interest-rate cutting cycles by the Czech and Hungarian central banks.

The forint EURHUF= had fallen by 0.1% to 401.80 to the euro by 0953 GMT on Monday, off a low of 402.20, as it sat on the weak side of the big psychological level of 400 for a fourth consecutive session.

"In the morning, there was a ray of hope the forint could firm in a correction, but then everything started to weaken again," a Budapest trader said.

"But there is very little activity in the market, and we see a continuous, slow weakening... the forint's rate is determined by the international mood these days."

The crown EURCZK= also lost 0.1%, to 25.354 per euro, and was around its lowest levels since the beginning of August.

The zloty EURPLN= dropped to 4.323 to the euro to touch a three-week low as it has fallen out of a long-held range between 4.25-4.30 in which it had sat since mid-August. The zloty had been trading at four-year highs in July.

"We will look for signs of calm," ING said. "Rate differentials remain at a record high after last week across the board and central bank hawkishness should help erase some losses later."

Despite continued interest rate cuts, Hungarian and Czech central bankers have said they will be cautious about further easing. At the same time, Polish and Romanian central banks stayed on pause at meetings last week.

Investors will turn their focus to upcoming inflation prints, in both central Europe and the United States, to gauge the rate outlook.

"CE3 currencies are being buffeted around by global risk sentiment," Commerzbank said in a note.

"Which way they will move this week is impossible to predict. What one might say, though, is that the currencies are primed for a rebound as soon as global tensions ease and risk assets rally."



CEE MARKETS

SNAPSHOT

AT 1153 CET





CURRENCIES






Latest

Previous

Daily

Change



trade

close

change

in 2024

Czech crown

EURCZK=

25.3540

25.3310

-0.09%

-2.57%

Hungary forint

EURHUF=

401.8000

401.3500

-0.11%

-4.63%

Polish zloty

EURPLN=

4.3230

4.3180

-0.12%

+0.50%

Romanian leu

EURRON=

4.9772

4.9770

-0.00%

-0.06%

Serbian dinar

EURRSD=

116.9600

117.0300

+0.06%

+0.24%

Note: daily change

calculated from


1800 CET










Latest

Previous

Daily

Change




close

change

in 2024

Prague

.PX

1590.39

1591.7300

-0.08%

+12.47%

Budapest

.BUX

73643.29

73411.75

+0.32%

+21.48%

Warsaw

.WIG20

2279.66

2291.53

-0.52%

-2.70%

Bucharest

.BETI

17464.86

17459.75

+0.03%

+13.62%











Spread

Daily





vs Bund

change in

Czech Republic





spread

2-year

CZ2YT=RR

3.2990

0.0530

+106bps

+2bps

5-year

CZ5YT=RR

3.6360

0.1890

+152bps

+15bps

10-year

CZ10YT=RR

3.9560

0.0830

+171bps

+6bps

Poland






2-year

PL2YT=RR

4.8890

0.0960

+265bps

+6bps

5-year

PL5YT=RR

5.1990

0.0800

+309bps

+4bps

10-year

PL10YT=RR

5.4900

0.0470

+325bps

+2bps








FORWARD RATE AGREEMENTS






3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

3.70

3.42

3.27

4.17

Hungary

HUFFRABUBOR=

6.13

5.95

5.72

6.31

Poland

PLNFRAWIBOR=

5.80

5.47

4.91

5.85

Note: FRA quotes

are for ask prices




**************************************************************










Reporting by Jason Hovet in Prague, Anita Komuves in Budapest, and Wlodarczak-Semczuk in Warsaw; Editing by Krishna Chandra Eluri

For related news and prices, click on the codes in brackets:
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Spot FX rates
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Asia spot FX ASIAFX= Latin America spot FX LATAMFX=

Other news and reports
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