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.

“Political 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,” 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.

“The market is already quite short in EURCZK so not much to add at the moment,” 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.