Forint leads losses as investors digest taxation measures
Corrects zloty valuation to read 4.265 (not 4.65) to the euro, in paragraph 8
By Boldizsar Gyori
BUDAPEST, July 9 (Reuters) -Hungary's forint EURHUF= weakened on Tuesday after inflation for June came in below expectations and investors digested new government policies to balance the budget.
The forint touched its strongest point in a month against the euro on Monday before weakening beyond 395 following a government announcement that it would increase taxation measures on banks, energy and multinational companies.
It weakened further on Tuesday, trading 0.57% softer on the day at 396.5 by 0750 GMT.
"I attribute the forint's weakening to yesterday's announcements, and not to the lower-than-expected inflation data," a local trader said.
Hungary's headline inflation rate HUCPIY=ECI eased to an annual 3.7% in June, below forecast, after an uptick in the previous two months, data showed on Tuesday.
"Despite the recession of inflation, I don't see a reason for the National Bank of Hungary to cut at its next rate-setting meeting," the trader added.
Hungary would keep existing windfall taxes on retailers and multi-national companies this year instead of phasing them out as expected, the prime minister's chief of staff told a briefing on Monday. The state would also tax banks' foreign currency transactions and hike transaction fees, he said.
The Polish zloty EURPLN=, central-Europe's biggest gainer this year, firmed slightly to trade at 4.265 to the euro, but analysts see limits for further appreciation.
"The EUR-PLN exchange rate dropped below 4.27 and thus came closer to this year's lows around 4.25. This level of support may limit further appreciation of the Polish zloty against the euro," Alior Bank said in a note.
The Czech crown traded at 25.2, down 0.1%.
CEE MARKETS | SNAPSHOT | AT 0950 CET | ||||
CURRENCIES | ||||||
Latest | Previous | Daily | Change | |||
trade | close | change | in 2024 | |||
EURCZK= | Czech crown | EURCZK= | 25.1900 | 25.1700 | -0.08% | -1.94% |
EURHUF= | Hungary forint | EURHUF= | 396.5000 | 394.2500 | -0.57% | -3.36% |
EURPLN= | Polish zloty | EURPLN= | 4.2645 | 4.2660 | +0.04% | +1.88% |
EURRON= | Romanian leu | EURRON= | 4.9738 | 4.9724 | -0.03% | +0.01% |
EURRSD= | Serbian dinar | EURRSD= | 116.9700 | 117.0500 | +0.07% | +0.24% |
Note: daily change | calculated from | 1800 CET | ||||
Latest | Previous | Daily | Change | |||
close | change | in 2024 | ||||
.PX | Prague | .PX | 1572.36 | 1575.5800 | -0.20% | +11.20% |
.BUX | Budapest | .BUX | 71308.69 | 71150.53 | +0.22% | +17.63% |
.WIG20 | Warsaw | .WIG20 | 2542.95 | 2539.40 | +0.14% | +8.53% |
.BETI | Bucharest | .BETI | 18461.12 | 18445.68 | +0.08% | +20.10% |
Spread | Daily | |||||
vs Bund | change in | |||||
Czech Republic | spread | |||||
CZ2YT=RR | 2-year | CZ2YT=RR | 3.9200 | -0.0340 | +100bps | -4bps |
CZ5YT=RR | 5-year | CZ5YT=RR | 3.9670 | -0.0030 | +143bps | -2bps |
CZ10YT=RR | 10-year | CZ10YT=RR | 4.1440 | 0.0010 | +161bps | -1bps |
Poland | ||||||
PL2YT=RR | 2-year | PL2YT=RR | 5.2530 | -0.0060 | +234bps | -2bps |
PL5YT=RR | 5-year | PL5YT=RR | 5.7000 | -0.0190 | +316bps | -3bps |
PL10YT=RR | 10-year | PL10YT=RR | 5.8050 | 0.0030 | +328bps | -1bps |
FORWARD RATE AGREEMENTS | ||||||
3x6 | 6x9 | 9x12 | 3M interbank | |||
Czech Rep | CZKFRAPRIBOR= | 4.31 | 4.05 | 3.87 | 4.68 | |
Hungary | HUFFRABUBOR= | 6.56 | 6.29 | 6.00 | 6.87 | |
Poland | PLNFRAWIBOR= | 5.83 | 5.77 | 5.55 | 5.85 | |
Note: FRA quotes | are for ask prices | |||||
************************************************************** | ||||||
Reporting by Boldizsar Gyori in Budapest; editing by Christina Fincher
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