CEE MARKETS-FX up on weak dollar, zloty eyes EU Court's mortgage ruling

Credit: REUTERS/BERNADETT SZABO

Central European currencies firmed on Thursday benefiting from a weaker U.S. dollar on world markets, with the Polish zloty recording only marginal gains in cautious trade as investors focus on a European court decision on FX mortgages.

By 0810 GMT, the Hungarian forint EURHUF= extended previous day's gains to add 0.34% at 360.95 per euro, outperforming regional peers for the third consecutive session. The zloty EURPLN= was up 0.1% on the day at 4.58.

"This is a correction after the weakening that we recently saw. The weakening of the dollar also helped emerging markets," a Budapest-based trader said.

The central bank's statement on Tuesday it was ready to prevent any sustained rise in Hungarian inflation as the economy recovers from pandemic-induced shock also continued to support the currency.

Erste Bank said in a note that "as it has been broadly expected," the U.S. Federal Reserve kept monetary policy unchanged, signalling they are not yet ready to cut support to the economy.

"The U.S. dollar depreciated after the announcement, CEE currencies benefited ... with exception of the Polish zloty."

The Court of Justice of the European Union (CJEU) will rule on five questions concerning Swiss franc mortgages on Thursday, which will have major implications for Polish banks.

It will address the question of when the period during which banks can make claims to have their capital returned starts. This could potentially open the door to major losses if the decision means this time limit has expired in many cases.

Elsewhere, the Czech crown EURCZK= was up 0.14% to trade at 25.8750 against the euro and the Romanian leu was flat at 4.9265.

CEE MARKETS

SNAPSHOT

AT 1013 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2021

Czech crown

EURCZK=

25.8700

25.9100

+0.15%

+1.39%

Hungary forint

EURHUF=

360.9500

362.1800

+0.34%

+0.49%

Polish zloty

EURPLN=

4.5790

4.5875

+0.19%

-0.43%

Romanian leu

EURRON=

4.9270

4.9284

+0.03%

-1.26%

Croatian kuna

EURHRK=

7.5580

7.5600

+0.03%

-0.14%

Serbian dinar

EURRSD=

117.5500

117.6250

+0.06%

+0.02%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2021

Prague

.PX

1110.32

1103.7100

+0.60%

+8.10%

Budapest

.BUX

43663.04

43549.43

+0.26%

+3.69%

Warsaw

.WIG20

2041.97

2029.64

+0.61%

+2.92%

Bucharest

.BETI

11409.26

11398.47

+0.09%

+16.35%

Ljubljana

.SBITOP

1061.41

1057.91

+0.33%

+17.82%

Zagreb

.CRBEX

1890.11

1886.94

+0.17%

+8.67%

Belgrade

.BELEX15

755.44

770.56

-1.96%

+0.91%

Sofia

.SOFIX

521.03

523.94

-0.56%

+16.42%

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

2-year

CZ2YT=RR

0.5910

-0.0460

+128bps

-5bps

5-year

CZ5YT=RR

1.2740

-0.1610

+185bps

-17bps

10-year

CZ10YT=RR

1.7460

-0.0010

+196bps

-2bps

Poland

2-year

PL2YT=RR

0.1050

0.0050

+079bps

+1bps

5-year

PL5YT=RR

0.8280

-0.0050

+141bps

-1bps

10-year

PL10YT=RR

1.5980

0.0060

+181bps

-1bps

FORWARD

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

0.43

0.65

0.97

0.36

Hungary

HUFFRABUBOR=

0.97

1.14

1.30

0.79

Poland

PLNFRAWIBOR=

0.26

0.29

0.40

0.21

Note: FRA quotes

are for ask prices

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

(Additional reporting by Anita Komuves in Budapest, Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Krishna Chandra Eluri)

((radu.marinas@thomsonreuters.com; +40 21 527 04 33))

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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