CEE MARKETS-FX under pressure from global risk aversion but losses limited
WARSAW, Nov 6 (Reuters) - A global risk-off sentiment fuelled by growing concerns regarding the profitability of massive investments in AI weighted on central European currencies on Friday, but hawkish signals from central banks in the region limited falls.
A steep rout in technology stocks rippled through global markets on fears that the Democrats' victory in the US midterm elections would increase regulatory scrutiny of AI and slow the data centre build-out.
Bourses in central Europe mostly fell in line with other markets, except for the market in Prague .PX which was unchanged on the day.
The US dollar held firm against major currencies, drawing support from safe-haven demand and weighing on central European currencies.
The Polish zloty was down 0.1% at 4.3975 per euro at 0822 GMT.
"For now, it is clear that the zloty may receive some support from the NBP's (Polish central bank's) shift toward a more hawkish stance," ING analysts said.
"Nevertheless, global factors remain the primary driver; yesterday’s trading saw a rapid swing back to risk-off sentiment, renewing pressure on CEE currencies. EUR/PLN is expected to settle somewhere within the 4.400–4.410 range."
The Czech National Bank (CNB) raised interest rates for the second time this year in a narrow vote on Thursday to rein in core inflation and energy-driven price pressures, but said the move did not start a tightening cycle.
"The main takeaway from the CNB meeting was the 4-3 split within the board, following a long period of a strong majority. The market interprets this as a dovish signal, suggesting the CNB is unwilling to hike rates further unless the inflation situation deteriorates significantly," ING said.
Czech market rates continued to fall after the central bank's meeting and are down over 30 basis points in the past week, reducing bets on the extent of tightening ahead; forward rates now price in a further two rate hikes over the next year.
The Czech crown was stable at 24.3160 per euro while the Hungarian forint was traded at 364.
"Due to deteriorating international investor sentiment, the euro-forint exchange rate headed upwards and returned to its previous rising trend channel," brokerage Equilor said.
"The lower trend line currently provides support at 363.40, an important level also lies at 364, while on the upside resistance levels are seen in the 364.80-365.30 range."
CEE MARKETS SNAPSHOT AT 0922 CET | |||||
CURRENCIES | Latest trade | Previous close | Daily change | Change in 2026 | |
Czech crown | 24.3160 | 24.3210 | +0.02% | -0.61% | |
Hungary forint | 364.0000 | 363.8000 | -0.05% | +5.59% | |
Polish zloty | 4.3975 | 4.3925 | -0.11% | -4.14% | |
Romanian leu | 5.3409 | 5.3360 | -0.09% | -4.62% | |
Serbian dinar | 117.4600 | 117.6000 | +0.12% | -0.14% | |
Note: daily change calculated from 1800 CET | |||||
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STOCKS | Latest | Previous close | Daily change | Change in 2026 | |
Prague | .PX | 2638.56 | 2639.6700 | -0.04% | -1.75% |
Budapest | .BUX | 143625.19 | 144484.17 | -0.59% | +29.36% |
Warsaw | .WIG20 | 4157.76 | 4209.15 | -1.22% | +30.58% |
Bucharest | .BETI | 34308.18 | 34583.28 | -0.80% | +40.38% |
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BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
Czech Rep 2-year | 4.2493 | -0.0064 | +132bps | +3bps | |
Czech Rep 5-year | 4.5324 | -0.0150 | +153bps | +2bps | |
Czech Rep 10-year | 5.1388 | -0.0107 | +192bps | +2bps | |
Poland 2-year | 4.7860 | 0.0110 | +185bps | +5bps | |
Poland 5-year | 5.5610 | -0.0650 | +256bps | -3bps | |
Poland 10-year | 6.0870 | -0.0370 | +287bps | +0bps | |
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FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
Czech Rep | , | 4.21 | 4.40 | 4.51 | 3.98 |
Poland | , | 4.17 | 4.38 | 4.49 | 3.91 |
Note: FRA quotes are for ask prices | |||||