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Forint lowest since March, zloty weak before Polish rate decision



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-Forint lowest since March, zloty weak before Polish rate decision</title></head><body>

WARSAW, Oct 2 (Reuters) -The Hungarian forint fell to its weakest against the euro in 6-1/2 months on Wednesday, while the Czech crown hit a new eight-week low and the zloty eased before a Polish rate decision.

Falling interest rates in Hungary and the Czech Republic have put pressure on those countries' currencies, while the zloty has been supported as the Polish central bank paused rate cuts for the past year.

The zloty is still within sight of multi-year highs hit earlier this year.

Economists polled by Reuters expect the National Bank of Poland to extend that pause and maintain its base interest rate at 5.75% on Wednesday, as inflation rebounds above target.

By 0935 GMT the zloty EURPLN= was down 0.1% against the euro at 4.296, nearing the psychological 4.30 level it has remained below since mid-September.

A Warsaw-based trader said the zloty would likely breach the that level on Wednesday as escalation of the conflict in the Middle East this week weighed on currencies.

"A stronger dollar, higher oil prices - this also has an impact on the currencies of emerging markets, including the zloty," the trader said.

"All this is happening against the backdrop of the (Polish) monetary policy council, (U.S.) payrolls on Friday, but I think this global factor is dominant at the moment," the trader said, referring to the escalation in the Middle East conflict.

The dollar held onto its biggest gains in a week on Wednesday after an Iranian missile attack on Israel.

In Hungary, the forint EURHUF= lost 0.3% to 399.25 per euro and touched its lowest level since mid-March.

"The FX market has fully switched into risk-off mode," ING said in a note.

ING said a growing divergence between central and eastern European currencies and the region's interest rates market will have to be closed at some point, allowing for the currencies' weakness to fade.

"The Polish zloty seems most appealing with the central bank meeting this week, while the Czech koruna may be attractive later," ING said. "The Hungarian forint, on the other hand, will have the hardest path to finding stable ground within the CEE peers."

The Czech crown EURCZK= was 0.2% lower to the euro at 25.33 to the euro, sitting around lows from early August.



CEE MARKETS

SNAPSHOT

AT 1135 CET





CURRENCIES






Latest

Previous

Daily

Change



trade

close

change

in 2024

Czech crown

EURCZK=

25.3300

25.2870

-0.17%

-2.48%

Hungary forint

EURHUF=

399.2500

397.9000

-0.34%

-4.02%

Polish zloty

EURPLN=

4.2960

4.2900

-0.14%

+1.13%

Romanian leu

EURRON=

4.9765

4.9759

-0.01%

-0.04%

Serbian dinar

EURRSD=

116.9900

117.0300

+0.03%

+0.22%

Note: daily change

calculated from


1800 CET










Latest

Previous

Daily

Change




close

change

in 2024

Prague

.PX

1597.65

1604.5300

-0.43%

+12.99%

Budapest

.BUX

74324.54

74189.72

+0.18%

+22.61%

Warsaw

.WIG20

2322.43

2315.86

+0.28%

-0.88%

Bucharest

.BETI

17495.20

17568.14

-0.42%

+13.82%











Spread

Daily





vs Bund

change in

Czech Republic





spread

2-year

CZ2YT=RR

3.2010

0.0090

+116bps

-1bps

5-year

CZ5YT=RR

3.3760

0.0330

+146bps

+0bps

10-year

CZ10YT=RR

3.7210

0.0450

+163bps

+0bps

Poland






2-year

PL2YT=RR

4.7730

-0.0830

+273bps

-10bps

5-year

PL5YT=RR

4.9960

0.0740

+308bps

+4bps

10-year

PL10YT=RR

5.3330

0.0290

+324bps

-2bps








FORWARD RATE AGREEMENTS






3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

3.67

3.30

3.05

4.20

Hungary

HUFFRABUBOR=

5.94

5.58

5.12

6.30

Poland

PLNFRAWIBOR=

5.77

5.43

4.81

5.84

Note: FRA quotes

are for ask prices




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










Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague and Anita Komuves in Budapest. Editing by Jane Merriman

For related news and prices, click on the codes in brackets:
All emerging market news EMRG CEEU CEE/

Spot FX rates
Eastern Europe spot FX EEFX= Middle East spot FX MEFX=
Asia spot FX ASIAFX= Latin America spot FX LATAMFX=

Other news and reports
World central bank news CEN Economic Data Guide ECONGUIDE
Official rates GLOBAL/INT Emerging Diary EMRG/DIARY
Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY
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