CEE MARKETS-Forint leads FX losses, crown lower after inflation data

Reuters
11 Nov 2024
CEE MARKETS-Forint leads FX losses, crown lower after inflation data

By Anita Komuves

BUDAPEST, Nov 11 (Reuters) - Central European currencies eased on Monday, with the Hungarian forint leading losses as a stronger U.S. dollar returned pressure, while the crown moved little after Czech inflation accelerated.

Markets were facing thinner liquidity with a public holiday in Poland and Veterans Day in the United States.

The forint EURHUF= had eased 0.4% to trade at 408.05 per euro by 0920 GMT, following wild swings last week after Donald Trump's U.S. election victory.

The Hungarian currency had dropped as far as 412.50 last week, its lowest level since December 2022, before rebounding.

"The forint is weakening as the dollar is firming, but it is still stronger than it was before the election," an FX trader in Budapest said.

Central European currencies have recovered ground since the swings seen after the U.S. election but will continue to face pressure from a stronger dollar and uncertainty over the impacts of potential Trump policies like tariffs.

ING said it was keeping a "bearish bias" for the region.

"We view Thursday's market correction and rally as a post-election positioning adjustment but believe CEE cannot escape the negative global outlook," it said.

In the Czech Republic, the crown EURCZK= edged down 0.1% to 25.272 per euro, still trading near mid-October levels where it firmed last Thursday.

Data on Monday showed Czech headline inflation picked up to a rate of 2.8% year-on-year in October, its highest since April.

The Czech National Bank extended its year-long monetary easing campaign last week with a 25 basis-point interest rate cut on Thursday, but cautioned about further steps due to inflation pressures.

"The prospect of further growth in inflation, which is heading towards or slightly above the 3% mark, will probably make central bankers more cautious. We assume that the CNB will proceed with further rate increases only in the first quarter of next year," UniCredit economist Patrik Rozumbersky said.

The Romanian leu EURRON= was little moved, trading at 4.9745, within the narrow corridor it has remained in since early September.

Romania's central bank held its benchmark interest rate ROINTR=ECI at 6.50% on Friday, warning inflation will not return within target before early 2026. The bank was scheduled to release new forecasts for 2024 and 2025 later on Monday.

CEE MARKETS

SNAPSHOT

AT 1020 CET

CURRENCIES

Latest

Previous

Daily

Change

trade

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

25.2800

25.2500

-0.12%

-2.29%

EURHUF=

Hungary forint

EURHUF=

408.0500

406.2500

-0.44%

-6.09%

EURPLN=

Polish zloty

EURPLN=

4.3350

4.3270

-0.18%

+0.22%

EURRON=

Romanian leu

EURRON=

4.9745

4.9755

+0.02%

-0.00%

EURRSD=

Serbian dinar

EURRSD=

116.9300

116.9800

+0.04%

+0.27%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2024

.PX

Prague

.PX

1670.14

1665.1000

+0.30%

+18.11%

.BUX

Budapest

.BUX

76821.26

76250.51

+0.75%

+26.73%

.WIG20

Warsaw

.WIG20

2298.30

2298.30

+0.00%

-1.91%

.BETI

Bucharest

.BETI

17482.94

17374.51

+0.62%

+13.74%

Spread

Daily

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

3.3610

0.0030

+119bps

+2bps

CZ5YT=RR

5-year

CZ5YT=RR

3.6680

-0.0370

+149bps

-1bps

CZ10YT=RR

10-year

CZ10YT=RR

3.9750

0.0030

+164bps

+3bps

Poland

PL2YT=RR

2-year

PL2YT=RR

4.9210

0.0010

+275bps

+2bps

PL5YT=RR

5-year

PL5YT=RR

5.3220

-0.0020

+314bps

+2bps

PL10YT=RR

10-year

PL10YT=RR

5.6350

-0.0520

+330bps

-2bps

FORWARD RATE AGREEMENTS

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

3.74

3.52

3.35

3.95

Hungary

HUFFRABUBOR=

6.44

6.22

6.00

6.51

Poland

PLNFRAWIBOR=

5.71

5.21

4.88

5.84

Note: FRA quotes

are for ask prices

**************************************************************

(Reporting by Anita Komuves in Budapest and Jason Hovet in Prague, editing by Ed Osmond)

((komuves.anita@thomsonreuters.com)(+36 70 795 8815))

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