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EU top court ruling adds to pressure on forint



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-EU top court ruling adds to pressure on forint</title></head><body>

By Alan Charlish

WARSAW, June 14 (Reuters) -Central European currencies fell on Friday, with the Hungarian forint EURHUF= hovering around a three-month low to the euro after Budapest was given a hefty fine by the European Union over its migration policy.

The European Union's top court said on Thursday Hungary must pay a 200-million-euro ($214 million) fine for not implementing changes to its policy of handling migrants and asylum seekers at its border, as well as pay a daily fine of one million euros until it fully implements the measures.

"Yesterday, there was this unpleasant news that Hungary will have to pay a much higher fee (to the EU) than expected, which caused the forint to weaken," Zoltan Arokszallasi, Head of Research at MBH Bank said.

"If any substantial government reaction arrives on this today, that might influence the forint, otherwise I expect mood-driven trading today."

At 0825 GMT, the forint was 0.16% weaker against the euro at 397.65.

Markets were also looking ahead to a ratings decision from Fitch on Hungary.

The euro was around 0.5% weaker against the dollar on the day, and the stronger greenback weighed on central European currencies.

The Czech crown EURCZK= was 0.10% weaker at 24.7070 to the euro and the Polish zloty EURPLN= was 0.18% weaker at 4.3560.

A stronger dollar is negative for emerging market currencies as it reduces the premium attached to holding riskier assets.

"You can see the euro/dollar moving lower. This time, however, it is not a dollar-driven story but rather a euro-driven story," said Peter Virovacz, senior economist at ING in Hungary.

"The French election created a lot of question marks regarding the future of Europe," he said, adding that poor results in the European elections for governments in Paris and Berlin created uncertainty about fiscal policies.

In the Czech Republic, bank CSOB said the crown came under pressure amid a strong dollar and comments from Czech central bank Governor Ales Michl about keeping a chance of a 50-basis-point cut in play at the June 27 meeting.

"We don't expect any more significant impulses for the crown the rest of the week. It will follow mainly the eurodollar's dynamics and any more possible central banker comments," CSOB said.





CEE MARKETS

SNAPSHOT

AT 1024 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

24.7070

24.6820

-0.10%

-0.02%

EURHUF=

Hungary forint

EURHUF=

397.6500

397.0000

-0.16%

-3.64%

EURPLN=

Polish zloty

EURPLN=

4.3560

4.3480

-0.18%

-0.26%

EURRON=

Romanian leu

EURRON=

4.9775

4.9771

-0.01%

-0.06%


Note: daily change

calculated from



1800 CET












Latest

Previous

Daily

Change





close

change

in 2024

.PX

Prague

.PX

1517.96

1531.0800

-0.86%

+7.35%

.BUX

Budapest

.BUX

69960.66

70022.97

-0.09%

+15.41%

.WIG20

Warsaw

.WIG20

2397.07

2401.63

-0.19%

+2.31%

.BETI

Bucharest

.BETI

17858.31

17861.11

-0.02%

+16.18%













Spread

Daily






vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

4.1650

-0.0250

+136bps

+6bps

CZ5YT=RR

5-year

CZ5YT=RR

4.1590

0.0010

+174bps

+9bps

CZ10YT=RR

10-year

CZ10YT=RR

4.2540

0.0100

+185bps

+10bps


Poland






PL2YT=RR

2-year

PL2YT=RR

5.2240

0.0270

+241bps

+11bps

PL5YT=RR

5-year

PL5YT=RR

5.5820

0.0040

+316bps

+9bps

PL10YT=RR

10-year

PL10YT=RR

5.7270

0.0080

+333bps

+10bps



FORWARD






($1 = 0.9340 euros)





Reporting by Alan Charlish in Warsaw, Boldizsar Gyori in Budapest, Jason Hovet in Prague; Editing by Janane Venkatraman

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