PX

CEE MARKETS-FX start week lower together after recent divergence

Credit: REUTERS/DAVID W CERNY

PRAGUE, March 18 (Reuters) - Central Europe's currencies mostly weakened on Monday, moving in the same direction after largely diverging so far in 2024, amid caution before a U.S. Federal Reserve meeting this week along with expectations of a further Czech interest rate cut.

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, is stronger than the start of the year as rates stay on hold but has faded recently.

Easing policy in the region is cutting rate differentials as the Federal Reserve and European Central Bank have yet to lower their rates, and markets globally will be watching this week for the U.S. central bank's projections for cuts ahead.

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.

The crown EURCZK= gained around 0.8% last week amid hawkish central banker comments. It had touched two-year lows beyond 25.50 per euro last month. On Monday, it traded 0.3% down on the day at 25.202 by 0937 GMT.

"We think the (crown) strengthened too quickly, which may have been triggered by hawkish comments from the CNB," ING said in a note. "We believe an acceleration in the pace of rate cuts will remain on the table for the next meeting, which should keep the (crown) under pressure."

ING added the forint could renew gains after Hungary's government said it would conduct talks with the central bank about legal changes that the bank had said would reduce its independence.

The forint EURHUF= lost 0.4% to 394.20 per euro on Monday.

"The government backtracked a bit on its central bank law change, which calmed the markets but there are too many uncertainties around the forint to firm significantly, unless the Fed's decision or its following communication is beneficial for emerging markets," a Budapest-based trader said.

Poland's zloty EURPLN= was also down 0.3% at 4.3065 to the euro while Romania's leu EURRON= was steady at 4.972 per euro.

CEE MARKETS

SNAPSHOT

AT 1037 CET

CURRENCIES

Latest

Previous

Daily

Change

trade

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

25.2020

25.1330

-0.27%

-1.99%

EURHUF=

Hungary forint

EURHUF=

394.2000

392.7500

-0.37%

-2.79%

EURPLN=

Polish zloty

EURPLN=

4.3065

4.2935

-0.30%

+0.88%

EURRON=

Romanian leu

EURRON=

4.9720

4.9716

-0.01%

+0.05%

EURRSD=

Serbian dinar

EURRSD=

117.1000

117.2000

+0.09%

+0.12%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2024

.PX

Prague

.PX

1488.51

1480.6800

+0.53%

+5.27%

.BUX

Budapest

.BUX

65117.84

64988.33

+0.20%

+7.42%

.WIG20

Warsaw

.WIG20

2342.58

2350.97

-0.36%

-0.02%

.BETI

Bucharest

.BETI

16358.91

16246.54

+0.69%

+6.43%

Spread

Daily

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

3.6570

-0.0750

+074bps

-8bps

CZ5YT=RR

5-year

CZ5YT=RR

3.6200

0.0180

+114bps

+0bps

CZ10YT=RR

10-year

CZ10YT=RR

3.8330

0.0500

+138bps

+3bps

Poland

PL2YT=RR

2-year

PL2YT=RR

5.1490

-0.0150

+223bps

-2bps

PL5YT=RR

5-year

PL5YT=RR

5.3380

0.0480

+286bps

+3bps

PL10YT=RR

10-year

PL10YT=RR

5.4820

0.0340

+302bps

+1bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

4.70

3.86

3.35

5.89

Hungary

HUFFRABUBOR=

7.29

6.61

6.38

8.07

Poland

PLNFRAWIBOR=

5.87

5.72

5.43

5.85

Note: FRA quotes

are for ask prices

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

(Reporting by Jason Hovet in Prague, Boldizsar Gyori in Budapest and Alan Charlish in Warsaw; Editing by Andrew Cawthorne)

((jason.hovet@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.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.