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Forint pares gains ahead of interest rates decision next week



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-Forint pares gains ahead of interest rates decision next week</title></head><body>

WARSAW, July 19 (Reuters) -The Hungarian forint eased on Friday, weighed down by lower risk appetite and a firming dollar, and pulled back from its highest standing since early June.

A worldwide cyber outage that hit banks, airlines and broadcasters on Friday unsettled investors, although volatility in the currency market remained contained.

By 1108 GMT the Hungarian foring EURHUF= was down 0.2% against the euro to 391.25, pulling back from its almost 1-1/2-month high hit on Thursday.

"In the gloomy international sentiment, the forint is also weakening," Hungarian lender MBH bank said in a note.

Hungary's central bank could deliver its 15th consecutive rate cut next Tuesday, lowering its base rate by 25 basis points to 6.75%, although analysts in a Reuters poll were almost evenly split between a cut and a first pause in rate easing in more than a year.

"I don't expect the NBH (National Bank of Hungary) to cut its base rate next Tuesday, given their communication and that they expect inflation to surge at the end of summer," a Budapest-based trader said.

"But if the forint firms to a level that allows them to cut by 25bps, that would negatively impact the forint. However, a 25 bps cut would not cause drama."

The Polish zloty EURPLN= traded sideways at 4.2880 per euro, near its weakest levels since mid-July.

Polish lender Bank Millennium said the zloty was rather unmoved by Thursday's data from the labour market and the industry, and that a rather empty macroeconomic data calendar would help the currency stabilise.

Polish industrial output PLIPY=ECI unexpectedly returned to growth in June, data on Thursday showed, defying analyst expectations that negative calendar effects and weak demand would lead it to contract.

"Without new impulses, the EUR/PLN exchange rate should stabilize, in our opinion, slightly below the psychological level of 4.30," Bank Millennium analysts wrote in a note.

The Czech crown EURCZK= was also flat against the euro at 25.2560.

On Thursday, the European Central Bank kept interest rates unchanged, as expected, but said September's meeting was "wide open" as it downgraded its view of the euro zone's economic prospects and predicted that inflation would keep on falling.




CEE MARKETS

SNAPSHOT

AT 1308 CET





CURRENCIES






Latest

Previous

Daily

Change



trade

close

change

in 2024

Czech crown

EURCZK=

25.2560

25.2580

+0.01%

-2.20%

Hungary forint

EURHUF=

391.2500

390.3700

-0.22%

-2.06%

Polish zloty

EURPLN=

4.2880

4.2865

-0.04%

+1.32%

Romanian leu

EURRON=

4.9710

4.9690

-0.04%

+0.07%

Serbian dinar

EURRSD=

116.9500

117.0200

+0.06%

+0.25%

Note: daily change

calculated from


1800 CET










Latest

Previous

Daily

Change




close

change

in 2024

Prague

.PX

1609.89

1612.5200

-0.16%

+13.85%

Budapest

.BUX

72801.42

72899.65

-0.13%

+20.09%

Warsaw

.WIG20

2472.35

2496.44

-0.96%

+5.52%

Bucharest

.BETI

18644.47

18749.46

-0.56%

+21.30%











Spread

Daily





vs Bund

change in

Czech Republic





spread

2-year

CZ2YT=RR

3.7030

-0.1750

+095bps

-20bps

5-year

CZ5YT=RR

3.7410

-0.0010

+134bps

-3bps

10-year

CZ10YT=RR

3.8920

-0.0730

+146bps

-10bps

Poland






2-year

PL2YT=RR

5.0830

0.0290

+233bps

+1bps

5-year

PL5YT=RR

5.4870

0.0200

+309bps

-1bps

10-year

PL10YT=RR

5.6260

0.0210

+319bps

-1bps


FORWARD







3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

4.13

3.77

3.52

4.60

Hungary

HUFFRABUBOR=

6.39

6.52

5.74

6.80

Poland

PLNFRAWIBOR=

5.82

5.70

5.39

5.86

Note: FRA quotes

are for ask prices




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




Reporting by Karol Badohal in Warsaw and Boldizsar Gyori in Budapest; Editing by Vijay Kishore

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