CEE MARKETS-Crown, forint off multi-week highs as FX rally pauses
PRAGUE, Oct 15 (Reuters) - The Hungarian forint and Czech crown hovered around three-week highs as a slight rally by central Europe's currencies paused, with markets in risk-off mode as investors weighed prospects of a US interest rate hike.
After trending lower in September, currencies have seen a small rebound in recent weeks, although an acceleration in US consumer prices in September has put another rate hike on the radar and helped the dollar
"Our bearish CEE FX view remains unchanged: a firmer US dollar and record-high gas prices will make it difficult for regional currencies to sustain gains," ING said in a note
"The (Polish zloty) looks particularly vulnerable given the (central bank's) dovish stance relative to market pricing"
The zloty was a touch stronger at 4.37 to the euro - the region's main reference currency - on Thursday
The Czech central bank is the only in the region to have raised interest rates this year, while Poland's policymakers have shown no rush to tighten with rising fuel costs pushing inflation up
Polish central banker Ireneusz Dabrowski said in an interview published on Wednesday that interest rates could remain unchanged until the beginning of next year, but the bank would not hesitate to raise them if data is unfavourable
In other trading, stock markets were mixed but little changed
The forint was a tad higher on the day at 363.90 per euro, off a high of 363.00 hit on Wednesday, and the crown added 0.1%, reaching 24.35 to the euro; both have hit multi-week highs this week but remain well off peaks hit at the end of the summer months
Bank CSOB said the crown would continue to track global markets until Czech policymakers begin commenting on expectations for the next rate meeting in November, when some analysts expect a rate hike could be on the table
"On one hand, the crown will not welcome a strong dollar, reflecting yesterday's higher inflation figures. On the other hand, it may feel some relief from a slight decline in oil prices," CSOB said
CEE MARKETS SNAPSHOT AT 1002 CET | |||||
CURRENCIES | Latest trade | Previous close | Daily change | Change in 2026 | |
Czech crown | 24.3500 | 24.3770 | +0.11% | -0.75% | |
Hungary forint | 363.9000 | 364.0000 | +0.03% | +5.62% | |
Polish zloty | 4.3700 | 4.3720 | +0.05% | -3.53% | |
Romanian leu | 5.3340 | 5.3325 | -0.03% | -4.50% | |
Serbian dinar | 117.3500 | 117.4200 | +0.06% | -0.04% | |
Note: daily change calculated from 1800 CET | |||||
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STOCKS | Latest | Previous close | Daily change | Change in 2026 | |
Prague | .PX | 2623.00 | 2617.3300 | +0.22% | -2.33% |
Budapest | .BUX | 143681.49 | 143485.08 | +0.14% | +29.41% |
Warsaw | .WIG20 | 4202.30 | 4207.97 | -0.13% | +31.98% |
Bucharest | .BETI | 34291.88 | 33831.75 | +1.36% | +40.32% |
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BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
Czech Rep 2-year | 4.3187 | -0.0379 | +128bps | +2bps | |
Czech Rep 5-year | 4.6121 | -0.0913 | +146bps | -2bps | |
Czech Rep 10-year | 5.2420 | -0.1049 | +186bps | -2bps | |
Poland 2-year | 4.7260 | -0.3250 | +168bps | -27bps | |
Poland 5-year | 5.8770 | -0.1310 | +272bps | -6bps | |
Poland 10-year | 6.2890 | -0.1060 | +291bps | -2bps | |
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FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
Czech Rep | , | 4.29 | 4.59 | 4.74 | 3.91 |
Poland | , | 4.27 | 4.63 | 4.80 | 3.90 |
Note: FRA quotes are for ask prices | |||||