Hungarian forint climbs to six-week high, outperforms peers
By Anita Komuves
BUDAPEST, July 18 (Reuters) -The Hungarian forint firmed on Thursday, extending its gains from the past week to trade at a six-week high as it got support from a weaker U.S. dollar, while other central European currencies treaded water.
The forint EURHUF= added 0.42% on the day to trade at 389.50 per euro, its strongest level since early June.
The forint has firmed about 2.4% in a little less than a month, rebounding from a three-month low hit in the middle of June.
"A weaker dollar is helping the forint, although it is a calm summer trading day," an FX trader in Budapest said.
Top Federal Reserve officials said on Wednesday the U.S. central bank is "closer" to cutting interest rates, which contributed to an easing of the dollar.
"If the dollar stays near its current levels, and if Hungarian central bank does not cut its base rate next week, then the forint could continue to firm until 385-386," 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.
Deputy Governor Barnabás Virág said earlier this week that a possible further small reduction in the base rate is an "open question" during next Tuesday's policy meeting.
Elsewhere, the Czech crown EURCZK= and the Polish zloty EURPLN= were flat as markets were also eyeing the European Central Bank (ECB) interest rate decision due later in the day.
The ECB is expected to keep interest rates unchanged while signaling that its next move is still set to be a cut, even if this guidance is likely to be vague and carry caveats.
Stocks in the region firmed, with Warsaw's blue-chip index .WIG20 leading gains with a 0.6% climb. Budapest's equities .BUX were trading 0.18% higher while Prague's stocks .PX added 0.21%.
CEE MARKETS | SNAPSHOT | AT 1009 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.2710 | 25.2650 | -0.02% | -2.25% |
Hungary forint | EURHUF= | 389.5000 | 391.1500 | +0.42% | -1.62% |
Polish zloty | EURPLN= | 4.2945 | 4.2980 | +0.08% | +1.16% |
Romanian leu | EURRON= | 4.9694 | 4.9700 | +0.01% | +0.10% |
Serbian dinar | EURRSD= | 116.9200 | 117.0200 | +0.09% | +0.28% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1603.57 | 1600.2500 | +0.21% | +13.41% |
Budapest | .BUX | 72712.57 | 72539.74 | +0.24% | +19.95% |
Warsaw | .WIG20 | 2470.86 | 2454.63 | +0.66% | +5.46% |
Bucharest | .BETI | 18681.52 | 18621.52 | +0.32% | +21.54% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.8790 | 0.2240 | +111bps | +23bps |
5-year | CZ5YT=RR | 3.7510 | 0.0170 | +134bps | +2bps |
10-year | CZ10YT=RR | 3.9580 | 0.0940 | +153bps | +9bps |
Poland | |||||
2-year | PL2YT=RR | 5.1460 | 0.1110 | +238bps | +12bps |
5-year | PL5YT=RR | 5.4400 | 0.0060 | +303bps | +1bps |
10-year | PL10YT=RR | 5.6000 | 0.0340 | +317bps | +3bps |
FORWARD | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 4.13 | 3.73 | 3.54 | 4.60 |
Hungary | HUFFRABUBOR= | 6.68 | 6.39 | 6.28 | 6.81 |
Poland | PLNFRAWIBOR= | 5.82 | 5.71 | 5.39 | 5.87 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** | |||||
Reporting by Anita Komuves in Budapest; Editing by Sherry Jacob-Phillips
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