CEE MARKETS-FX softens as markets worry about global growth
Band Alan Charlish
WARSAW, June 24 (Reuters) – Central European currencies were mostly somewhat weaker on Friday, at the end of a week in which fears that aggressive monetary policy tightening could tip the global economy into recession weighed in the foreign exchange markets.
The region’s rate setters embarked on a tightening cycle last year to rein in one of the continent’s highest inflations, but major central banks are now becoming more hawkish as fears of a global economic collapse rattled the markets.
“If you look at currencies, especially the forint and the zloty, recently they’ve been moving pretty much in tandem, so it looks like… no local factors are taken into account, it’s just global sentiment, which started to deteriorate,” said Piotr Poplawski, senior economist at ING in Warsaw.
At 08:51 GMT the Polish zloty EURPLN= was 0.13% weaker against the euro at 4.7135, while the Hungarian forint EURHUF= softened 0.22% at 400.85.
“The forint is underperforming against its peers as it is also under pressure from a twin deficit as well as the fact that there is still no agreement on EU recovery funds. . there just isn’t good news to support the forint,” said one trader. in Budapest.
The forint has been the worst performer among its CEE peers this year, losing more than 7.8% against the euro since the start of 2022 and fell to a record low of 403 to the euro last week.
The Czech Koruna remained stable at 24.755, ignoring a further drop in Czech consumer confidence.
The Czech central bank announced a sharp rate hike of 125 basis points on Wednesday.
After the decision, Governor Jiri Rusnok said the bank’s mandate to intervene in currency markets remained in place and the interventions prevented an unwanted weakening of the krone as an additional tool to fight inflation. .
Analysts say the krone will remain under pressure amid uncertainty around the entry of new governor Ales Michl, who has opposed rate hikes and will lead the bank from July.
At 10:51 a.m. CET
lei in Romanian
Note: daily change
+437 basis points
+659 basis points
+604 basis points
Note: ENG Quotes
are for asking prices
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(Reporting by Alan Charlish in Warsaw, Anita Komuves in Budapest and Jason Hovet in Prague; Editing by Alex Richardson)
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