CEE MARKETS-FX retreats as dollar consolidates gains, eyes on Fed

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By Radu-Sorin Marinas BUCHAREST, June 14 (Reuters) – Central European currencies fell on Monday as the forint led to regional losses against the euro and the Czech koruna retreating from 15-month highs last week , reflecting the movements of the euro against a stronger US dollar. Around 08:50 GMT, the Hungarian forint eased 0.6% to 350.2 against the euro, followed by the Czech crown at 25.4350, down 0.28% on the day. The Romanian leu was stable at 4.9190 and the zloty traded 0.2% lower at 4.5015. âWhile betting on a hike in interest rates can still help the crown, how the world markets deal with the US Fed will be key this week,â CSOB analysts said in a note. The dollar consolidated its gains on Monday after posting its biggest weekly gain in six weeks as traders reduced bearish bets ahead of a much-anticipated Federal Reserve meeting that could signal a shift in outlook for US monetary policy. Regional currencies were mostly stable near recent highs last week, supported by positive sentiment after the European Central Bank raised its growth forecast on Thursday. Rate hike expectations have also helped, as the central European region faces the biggest rise in inflation in the European Union as economies recover from the COVID-19 pandemic. Markets are anticipating a rate hike for June or August in the Czech Republic as Hungary’s central bank reiterated on Tuesday that it could become the first in the EU to launch a tightening cycle this month. âIn the coming days, the euro / zloty exchange rate will struggle to stay below 4.50. However, a shadow over the valuation of the zloty … will be the NBP chairman’s Friday conference, which has reduced the chances of an impending interest rate hikes, “Millennium Bank said in a note. EEC SNAPSHOT AT 1057 CURRENCY MARKETS THIS Latest daily change Previous change in bid closing in 2021 Czech 25.4350 25.3640 -0.28% + 3.12% Hungarian krone 350.2000 347.9400 -0.65% + 3.58% Polish forint 4.5040 4.4920 -0.27% +1.23% Romanian zloty 4, 9190 4.9180 – 0.02% -1.10% Croatian leu 7.4900 7.4913 + 0.02% + 0.77% Serbian Kuna 117.4800 117.5800 + 0.09% + 0.08% dinar% Budapest 48960.07 48845.84 + 0.23% +16 , 27% Warsaw 2,238.07 2,224.67 + 0.60% + 12.81% Bucares 11,550.88 11,520.46 + 0.26% + 17.80% t Ljubljan 1140.55 1141.85 -0.11% + 26.61% in Zagreb 1969.45 1968.82 +0.03% +13.23% Belgrade 781.71 782.16 -0.06% + 4.42% Sofia 542.29 542.48 -0, 04% + 21.17% Yiel d Yield Spread Daily change (bid) vs Bund change in Czech spread 2 years 0.2550 -0.0710 + 094bp -7bp 5yr 1.4950 -0.0220 + 212bp – 2bp Poland 2yr 0.3460 0.0180 +103 bp +2 bp 5 years 1.1980 -0.0190 +183 bp -2 bp FORWA RD 3×6 6×9 9×12 3M interbank k Czech
Hungary Poland Note: are for the prices requested The quotes FRA **************************************** **** ************ ********* (Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Emelia Sithole-Matarise)
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