CEE MARKETS-Zloty wins as markets remain under pressure
PRAGUE, June 17 (Reuters) – The Polish zloty rose from a 12-week low to rebound the most among Central European currencies on Friday, while the Czech koruna clung inside its recent narrow range.
Stocks were mixed and the Hungarian forint rose as markets stabilized somewhat after assets in the region came under pressure amid a global pullback from riskier assets this week.
The zloty EURPLN=, with local markets returning to action after a bank holiday Thursday, strengthened 0.7% to 4.697 per euro at 09:52 GMT. Warsaw shares caught up to their peers after the one-day break and fell as much as 2% before stabilizing at 0.5% by midday.
Analysts, however, doubted the zloty would sustain its gains amid deteriorating investor sentiment, with major central banks led by the US Federal Reserve tightening monetary policy. Fears of a recession grew as the Fed cut its economic growth forecast, putting pressure on emerging assets in Central Europe.
“An attempt to strengthen the Polish currency, apart from an increase in risk appetite – which we are not currently counting on – would, in our view, require signals from the Monetary Policy Council on the willingness of new solid interest rate hikes,” Millenium said. said the bank.
Remarks by National Bank of Poland Governor Adam Glapinski last week that the bank was near the end of its tightening cycle put pressure on the zloty.
In Hungary, the central bank unexpectedly raised its one-week deposit rate on Thursday, offering a 50 basis point increase.
the forint EURHUF= edged up 0.3% on Friday to 398.60 per euro, but remained stuck just past recent all-time lows.
The crown EURCZK= firmed 0.2% to 24.701 per euro as markets look to a Czech central bank meeting next week. Investors expect another big rate hike, possibly 100 basis points depending on market prices, as the board meets under its current composition for the time being.
From July, current board member Ales Michl, who opposed rate hikes, will take over as governor. His appointment in May hit the crown amid expectations of a dovish turn by the bank, forcing the central bank to step in to boost the currency.
Comments from Governor Jiri Rusnok and another central bank policymaker showed the bank is ready to act, and the krone is in a range of around 24.70 to the euro.
Societe Generale analysts, using central bank balance sheet data, estimated that the bank may have sold up to 5 billion euros ($5.26 billion), or about 3% of its huge international reserves. , since last month to defend the crown.
At 11:52 a.m. CET
lei in Romanian
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($1 = 0.9508 euros)
(Reporting by Jason Hovet in Prague, Gergely Szakacs in Budapest and Anna Koper in Warsaw Editing by Tomasz Janowski)
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