CEE MARKETS-FX down as the impact of the Polish interest rate hike fades; Czech tariff increase
PRAGUE, October 12 (Reuters) – Central European currencies mainly weakened on Tuesday, hit by a stronger US dollar that reduced risk appetite while a Polish rate hike last week and a jump in Czech inflation did not failed to give new impetus.
The Polish zloty and the Czech crown have been controlled by the dollar so far this month – the strength of the greenback is expected to continue to limit gains seen in the coming months, according to an October Reuters poll.
This is happening even as the region’s central banks have largely resumed policy tightening to calm inflation, which is reaching multi-year highs.
Poland’s central bank surprised markets last week by announcing an interest rate hike of 40 basis points, earlier than analysts expected.
But the zloty has since fallen from a three-week high to levels seen before the October 6 rate change. This EURPLN = was trading lower to 4.585 per euro at 09:10 GMT on Tuesday.
Political risks also hung, after Poland’s highest court ruled last week that parts of European Union treaties are incompatible with the Polish constitution, exacerbating a dispute between Brussels and Warsaw.
Bank Millennium said the start of rate hikes will support the zloty although the pressure is likely to remain in the coming days.
âPolitical factors limit the space for the appreciation of the zloty, so information from this area may have a clearer impact on the performance of the zloty,â he said.
Likewise, the crown EURCZK = slipped 0.2% to 25.42 per euro on Tuesday, a day after data showed September inflation hit a 13-year high, beating analysts’ expectations. The central bank said the data pointed to faster rate hikes than its summer forecast had predicted.
Forward rates now forecast around 100 basis points of rate hikes in the bank’s last two meetings in 2021, following a 75 basis point hike in September – the bank’s biggest hike in 24 years that surprised the steps.
The crown, however, has remained stuck in a range of 25,300 to 25,500 since September.
âThe market is already quite short in EURCZK so not much to add at the moment,â said one dealer.
Elsewhere, the Hungarian forint also weakened, down 0.2% to 360.05 per euro, and the Romanian leu EURRON = pushed down despite surprising inflation data rising to its highest level in a decade.
CEEC MARKETS
INSTANTANEOUS
AT 1110 CET
COINS
Latest
Previous
Daily
Switch
offer
close
cash
in 2021
EURCZK =
czech crown
EURCZK =
25.4200
25.3790
-0.16%
+ 3.18%
EURHUF =
Hungarian forint
EURHUF =
360.0500
359.2750
-0.22%
+ 0.74%
EURPLN =
Polish Zloty
EURPLN =
4.5850
4.5842
-0.02%
-0.56%
EURRON =
leu in Romanian
EURRON =
4.9500
4.9495
-0.01%
-1.72%
EURHRK =
Croatian Kuna
EURHRK =
7.5130
7.5155
+ 0.03%
+ 0.46%
EURRSD =
Serbian dinar
EURRSD =
117.5600
117.5450
-0.01%
+ 0.01%
Note: daily change
calculated from
1800 CET
STOCKS
Latest
Previous
Daily
Switch
close
cash
in 2021
.PX
Prague
.PX
1379.00
1376.1100
+ 0.21%
+ 34.26%
.BUX
Budapest
.BUX
54565.63
54432.56
+ 0.24%
+ 29.59%
.WIG20
Warsaw
.WIG20
2446.97
2457.36
-0.42%
+ 23.34%
.BETI
Bucharest
.BETI
12817.26
12801.95
+ 0.12%
+ 30.71%
.SBITOP
Ljubljana
.SBITOP
1157.13
1158.88
-0.15%
+ 28.45%
.CRBEX
Zagreb
.CRBEX
2041.90
2042.05
-0.01%
+ 17.40%
.BELEX15
Belgrade
.BELEX15
794.35
795.94
-0.20%
+ 6.11%
.SOFIX
Sofia
.SOFIX
570.06
570.64
-0.10%
+ 27.38%
OBLIGATIONS
Yield
Yield
Broadcast
Daily
(offer)
cash
against the Bund
switch
Czech Republic
broadcast
CZ2YT = RR
2 years
CZ2YT = RR
2.1000
0.0000
+ 279bps
+ 1bps
CZ5YT = RR
5 years
CZ5YT = RR
2.2400
-0.0050
+ 275bps
+ 0bps
CZ10YT = RR
10 years
CZ10YT = RR
2.2990
0.0730
+242 bp
+ 7bps
Poland
PL2YT = RR
2 years
PL2YT = RR
1.5460
0.0130
+223 bp
+ 2bps
PL5YT = RR
5 years
PL5YT = RR
2.1540
-0.0850
+ 266bps
-8bps
PL10YT = RR
10 years
PL10YT = RR
2.5650
0.0360
+ 269bps
+ 4bps
ENG
3×6
6×9
9×12
3M Interbank
Czech Republic
CZKFRAPRIBOR =
3.02
3.33
3.16
1.95
Hungary
HUFFRABUBOR =
2.36
2.75
2.99
1.84
Poland
PLNFRAWIBOR =
1.37
1.89
2.25
0.66
Note: FRA quotes are for the prices requested
************************************************** ************
(Reporting by Jason Hovet in Prague and Pawel Florkiewicz in Warsaw; editing by Kirsten Donovan)
((jason.hovet@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.