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Currencies erase some losses, but dollar adds pressure



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-Currencies erase some losses, but dollar adds pressure</title></head><body>

By Anita Komuves

BUDAPEST, Oct 15 (Reuters) -Central European currencies were a touch stronger versus the euro on Tuesday with Hungary's forint leading gains, although dollar strength kept a lid on gains.

The forint EURHUF= firmed 0.19% on the day to trade at 400.25 per euro, keeping in its recent range as the dollar's strength and European Central Bank rate cut expectations pulled it in different directions, an FX trader in Budapest said.

"The firming of the dollar is not helping, but the market is pricing in an ECB rate cut, and that supports the forint because it will change the rate differential in a way that puts the forint at an advantage, and the two forces balance each other out," the trader said.

The ECB's policy decision is scheduled for Thursday, with markets pricing in a 25-basis-point rate cut.

Hungarian central bank Deputy Governor Barnabas Virag last week flagged a likely pause in the easing of the bank's main interest rate, which remains the European Union's highest alongside Romania's, after an escalation of the conflict in the Middle East and a shift in the U.S. rate outlook pushed the forint to 18-month-lows.

Elsewhere, the Czech crown EURCZK= edged up 0.16% to 25.225 per euro, adding to its gains and pulling away from two-month lows hit earlier this month.

"The Czech koruna received a boost after surprisingly strong current account data yesterday," ING wrote in a note.

"We remain constructive on the slow Polish zloty and CZK gains within the region, although again, a lower EUR/USD does not suggest the possibility of a stronger rally here," they added.

The U.S. dollar was perched near it highest in more than two months against major currencies on Tuesday.

The Polish zloty EURPLN= was a touch stronger against the euro as it traded at 4.292, below the 4.30 psychological level it breached earlier this month.

"We maintain our assessment that fundamentally the złoty looks moderately optimistic in the eyes of foreign investors. However, attempts to strengthen the dollar may be a source of selling pressure," Bank Millennium wrote.



CEE MARKETS

SNAPSHOT

AT 1102 CET





CURRENCIES






Latest

Previous

Daily

Change



trade

close

change

in 2024

Czech crown

EURCZK=

25.2250

25.2650

+0.16%

-2.08%

Hungary forint

EURHUF=

400.2500

401.0000

+0.19%

-4.26%

Polish zloty

EURPLN=

4.2915

4.2940

+0.06%

+1.23%

Romanian leu

EURRON=

4.9751

4.9747

-0.01%

-0.02%

Serbian dinar

EURRSD=

116.9600

117.0300

+0.06%

+0.24%

Note: daily change

calculated from


1800 CET










Latest

Previous

Daily

Change




close

change

in 2024

Prague

.PX

1600.87

1600.1600

+0.04%

+13.21%

Budapest

.BUX

74192.31

74428.10

-0.32%

+22.39%

Warsaw

.WIG20

2319.61

2327.50

-0.34%

-1.00%

Bucharest

.BETI

17569.86

17593.76

-0.14%

+14.30%











Spread

Daily





vs Bund

change in

Czech Republic





spread

2-year

CZ2YT=RR

3.3470

-0.0200

+112bps

+2bps

5-year

CZ5YT=RR

3.6620

-0.0230

+156bps

+2bps

10-year

CZ10YT=RR

3.9370

-0.0390

+170bps

+0bps

Poland






2-year

PL2YT=RR

4.9060

-0.0390

+268bps

+0bps

5-year

PL5YT=RR

5.2270

-0.0830

+313bps

-5bps

10-year

PL10YT=RR

5.4790

-0.1430

+324bps

-11bps








FORWARD RATE AGREEMENTS






3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

3.81

3.55

3.41

4.15

Hungary

HUFFRABUBOR=

6.66

6.38

6.15

6.34

Poland

PLNFRAWIBOR=

5.77

5.45

4.97

5.86

Note: FRA quotes

are for ask prices




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












Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Mark Potter

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