Forint hovers at 18-month low, zloty traders eye Polish rate outlook
Interest rate cuts have weighed on the forint
Polish zloty best performer in region this year
Traders await Polish central bank's rate guidance
Central bank kept base rate unchanged on Wednesday
By Anita Komuves
BUDAPEST, Oct 3 (Reuters) -Central Europe's currencies steadied on Thursday after falling the previous day, with the Hungarian forint clinging around the psychological 400 per euro level that it weakened past in the previous session for the first time since March 2023.
By 0900 GMT, the forint EURHUF= had edged up 0.05% on the day and traded at 400.1 versus the euro, the region's main reference currency.
Central Europe's currencies weakened on Wednesday with the forint plunging to its lowest against the euro in 18 months as the conflict in the Middle East made investors risk-averse and boosted the safe-haven dollar. Prior to that, interest rate cuts in Hungary had added to forint pressures.
"The forint has been so close to 400 lately that it was just a question of time when it breaks it," an FX trader in Budapest said. "But this means that the central bank will probably not have room for a rate cut next month."
The National Bank of Hungary cut its base rate by 25 basis points to 6.5% on Sept. 24 and said that in the next three months the bank would decide on rates on a monthly basis, weighing the options of no change in rates or a small cut.
Elsewhere, the Czech crown EURCZK= was down 0.12%, trading at 25.348 per euro as it was stuck around two-month lows.
Falling interest rates in the Czech Republic have also been a drag on the crown, although analysts forecast the currency to be the lone gainer in central Europe in the coming year, according to a Reuters poll published on Thursday.
In Poland, the central bank has paused rate cuts for the past year, boosting the zloty, which has been the best performer in the region this year with a 1% gain.
The zloty EURPLN= eased 0.1% in mid-morning trade and was trading at 4.299 per euro, coming a day after Polish rate setters again left their base rate unchanged, as expected, with inflation inching upward.
Investors were looking toward a speech by Polish central bank Governor Adam Glapinski later in the day to gauge clues on the bank's future rate path.
"Having changed his guidance only last month, we do not expect a material further shift at this month’s press conference," Goldman Sachs wrote in a note.
CEE MARKETS | SNAPSHOT | AT 1100 CET | ||||
CURRENCIES | ||||||
Latest | Previous | Daily | Change | |||
trade | close | change | in 2024 | |||
EURCZK= | Czech crown | EURCZK= | 25.3480 | 25.3110 | -0.15% | -2.55% |
EURHUF= | Hungary forint | EURHUF= | 400.1000 | 400.3000 | +0.05% | -4.23% |
EURPLN= | Polish zloty | EURPLN= | 4.2990 | 4.2945 | -0.10% | +1.06% |
EURRON= | Romanian leu | EURRON= | 4.9763 | 4.9765 | +0.00% | -0.04% |
EURRSD= | Serbian dinar | EURRSD= | 116.9600 | 117.0600 | +0.09% | +0.24% |
Note: daily change | calculated from | 1800 CET | ||||
Latest | Previous | Daily | Change | |||
close | change | in 2024 | ||||
.PX | Prague | .PX | 1589.64 | 1596.6500 | -0.44% | +12.42% |
.BUX | Budapest | .BUX | 72637.33 | 73059.71 | -0.58% | +19.82% |
.WIG20 | Warsaw | .WIG20 | 2291.21 | 2317.70 | -1.14% | -2.21% |
.BETI | Bucharest | .BETI | 17436.14 | 17443.67 | -0.04% | +13.43% |
Spread | Daily | |||||
vs Bund | change in | |||||
Czech Republic | spread | |||||
CZ2YT=RR | 2-year | CZ2YT=RR | 3.2080 | 0.0060 | +115bps | -1bps |
CZ5YT=RR | 5-year | CZ5YT=RR | 3.4390 | 0.1090 | +148bps | +8bps |
CZ10YT=RR | 10-year | CZ10YT=RR | 3.7670 | 0.0270 | +163bps | +0bps |
Poland | ||||||
PL2YT=RR | 2-year | PL2YT=RR | 4.7970 | 0.0130 | +274bps | +0bps |
PL5YT=RR | 5-year | PL5YT=RR | 5.0410 | 0.0450 | +308bps | +2bps |
PL10YT=RR | 10-year | PL10YT=RR | 5.3720 | 0.0110 | +324bps | -2bps |
FORWARD RATE AGREEMENTS | ||||||
3x6 | 6x9 | 9x12 | 3M interbank | |||
Czech Rep | CZKFRAPRIBOR= | 3.68 | 3.30 | 3.05 | 4.18 | |
Hungary | HUFFRABUBOR= | 6.08 | 5.80 | 5.37 | 6.30 | |
Poland | PLNFRAWIBOR= | 5.78 | 5.47 | 4.88 | 5.86 | |
Note: FRA quotes | are for ask prices | |||||
************************************************************** |
Additonal reporting by Jason Hovet in Prague and Pawel Florkiewicz in Warsaw; Editing by Emelia Sithole-Matarise
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