PX

CEE MARKETS-Central European currencies await result of Fed meeting

Credit: REUTERS/David W Cerny

WARSAW, March 19 (Reuters) - Most central European currencies traded slightly lower on Tuesday, awaiting a U.S. Federal Reserve meeting which may influence the valuation of the dollar.

Traders were also keeping an eye on a Czech central bank policy announcement on Wednesday.

The Czech crown and Hungarian forint have fallen this year as their central banks cut rates in a continuing easing cycle though they have regained ground in the past week.

The Polish zloty, on the other hand, has strengthened since the start of the year as rates stay on hold though it has faded recently.

Analysts said markets were positioning themselves for the meeting of the U.S. Federal Reserve, with some assuming a slightly more hawkish scenario than the current communication and forecasts from Fed members.

The Fed is widely expected to keep rates where they are, although there is a degree of uncertainty over what policymakers might signal about the likely course of monetary policy stretching into 2025.

"The result is a strengthening dollar and rising U.S. bond yields. The consequences are also the weakening zloty - especially since the depreciation is supported by technical analysis - and cheaper Polish debt," Bank Millennium analysts wrote in a report.

"We maintain our scenario that the EUR/PLN exchange rate correction will extend to the level of 4.3285. Breaking it depends on the outcome of the Fed meeting ending tomorrow."

Poland's zloty EURPLN= was stable at 4.3190 per euro at 0928 GMT.

On Wednesday, the Czech National Bank (CNB) is expected to deliver another 50 basis point rate cut as a weaker-than-expected crown and lingering price pressures dampen thoughts of a quickening easing pace.

Easing policy in the region is cutting rate differentials as the Federal Reserve and European Central Bank have yet to lower their rates.

"In the rest of the week we expect a greater degree of volatility with the crown, and not only with regard to the CNB meeting, but also to Wednesday's actions of the Fed," analysts at Czech bank CSOB wrote in a note.

The crown EURCZK= was a touch down at 25.2400 per euro, the Hungarian forint EURHUF= off 0.2% at 395.3000 while Romania's leu EURRON= was stable at 4.9729 per euro.

CEE MARKETS

SNAPSHOT

AT 1028 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

25.2400

25.2250

-0.06%

-2.13%

EURHUF=

Hungary forint

EURHUF=

395.3000

394.6500

-0.16%

-3.06%

EURPLN=

Polish zloty

EURPLN=

4.3190

4.3205

+0.03%

+0.59%

EURRON=

Romanian leu

EURRON=

4.9729

4.9734

+0.01%

+0.03%

EURRSD=

Serbian dinar

EURRSD=

117.1600

117.2000

+0.03%

+0.07%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2024

.PX

Prague

.PX

1490.75

1492.3800

-0.11%

+5.43%

.BUX

Budapest

.BUX

65629.89

65450.33

+0.27%

+8.26%

.WIG20

Warsaw

.WIG20

2345.28

2350.87

-0.24%

+0.10%

.BETI

Bucharest

.BETI

16352.39

16347.25

+0.03%

+6.38%

Spread

Daily

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

3.7300

0.0130

+083bps

+3bps

CZ5YT=RR

5-year

CZ5YT=RR

3.6960

0.0100

+123bps

+2bps

CZ10YT=RR

10-year

CZ10YT=RR

3.9060

0.0220

+146bps

+3bps

Poland

PL2YT=RR

2-year

PL2YT=RR

5.2340

0.0570

+233bps

+7bps

PL5YT=RR

5-year

PL5YT=RR

5.4290

0.0190

+297bps

+3bps

PL10YT=RR

10-year

PL10YT=RR

5.5770

0.0180

+313bps

+3bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

4.72

3.94

3.44

5.89

Hungary

HUFFRABUBOR=

7.23

6.89

6.64

8.05

Poland

PLNFRAWIBOR=

5.88

5.80

5.54

5.86

Note: FRA quotes

are for ask prices

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

(Reporting by Jason Hovet in Prague, Boldizsar Gyori in Budapest and Anna Wlodarczak-Semczuk in Warsaw; editing by Jason Neely)

((anna.wlodarczak@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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