CEE MARKETS-Hungarian forint hits 18-year low against dollar as currencies suffer

Credit: REUTERS/Bernadett Szabo

FX lose ground against main reference euro currency

Currencies at multi-year lows against dollar

Stocks lose, Warsaw snaps winning streak sparked by low

Czech O2 shares gain as buyback news boosts support

PRAGUE, Sept 3 (Reuters) - Central European currencies touched new lows against the dollar and edged lower against the euro on Tuesday, while stock markets also fell as Brexit cast a shadow over economic bright spots.

Economies in the region have outpaced the euro zone and manufacturing surveys showing slight improvements on Monday had boosted markets.

But the export-reliant region is expected to slow in the coming quarters over uncertainties ranging from global trade tensions to a potential disorderly British exit from the European Union.

The latter could hurt the region by damaging trade both directly with Britain and, more importantly, indirectly as suppliers to bigger economies like Germany that count on the British market for exports.

On Tuesday, British lawmakers prepared to vote on the first stage of a plan to block Prime Minister Boris Johnson from pursuing a no-deal Brexit, fuelling market jitters.

A sharply falling euro - the region's main reference currency - against the dollar translated into further losses for Central European currencies against the U.S. currency, with the Hungarian forint HUF= hitting an 18-year low of 302.99 to the dollar.

The Czech crown EURCZK= and Polish zloty PLN= were also at more than two-year lows against the dollar.

Versus the euro, the zloty EURPLN= fell 0.1% to 4.365 to lead losses, while the forint EURHUF= and the crown EURCZK= ticked lower after slight gains on Monday.

"The crown is still under pressure because of uncertainty connected to Brexit," Czech bank CSOB said. It added industry and retail data this week could help buoy the currency.

Czech wage data on Tuesday showed still strong growth, rising a real 4.3% and nominal 7.2%, above forecasts.

Analysts said this was another reason the central bank - which halted a tightening cycle in May just as global central banks shifted to an easing bias - would remain in wait-and-see mode with rates.

Investors are also focused on the European Central Bank's meeting next week, expecting policymakers to loosen monetary policy.

"Until then, trading volatility may be limited," Poland's Bank Millennium said.

In stock markets, Warsaw's blue-chip index .WIG20 lost 1.9%, snapping a three-day win streak that started after it touched a 2-1/2 year low last week.

Telecom group O2 Czech Republic SPTT.PR rose up to 1%, gaining for a second straight session after news the company was again in the market last week as part of a buyback programme, making its first purchases since the end of 2017.

Its shares have traded since June at their lowest since 2016.

CEE MARKETS

SNAPSHOT

AT 1059 CET

CURRENCIES

Latest

Previous

Daily

Change

bid

close

change

in 2019

EURCZK=

Czech crown

EURCZK=

25.9000

25.8910

-0.03%

-0.75%

EURHUF=

Hungary forint

EURHUF=

331.1000

331.0500

-0.02%

-3.02%

EURPLN=

Polish zloty

EURPLN=

4.3654

4.3609

-0.10%

-1.74%

EURRON=

Romanian leu

EURRON=

4.7248

4.7243

-0.01%

-1.50%

EURHRK=

Croatian kuna

EURHRK=

7.4050

7.4030

-0.03%

+0.07%

EURRSD=

Serbian dinar

EURRSD=

117.4500

117.5100

+0.05%

+0.72%

Note: daily change

calculated from

1800 CET

Latest

Previous

Daily

Change

close

change

in 2019

.PX

Prague

.PX

1031.50

1036.4500

-0.48%

+4.56%

.BUX

Budapest

.BUX

39181.10

39707.43

-1.33%

+0.11%

.WIG20

Warsaw

.WIG20

2103.82

2144.48

-1.90%

-7.59%

.BETI

Bucharest

.BETI

9248.59

9259.73

-0.12%

+25.26%

.SBITOP

Ljubljana

.SBITOP

852.68

850.37

+0.27%

+6.02%

.CRBEX

Zagreb

.CRBEX

1865.11

1865.99

-0.05%

+6.65%

.BELEX15

Belgrade

.BELEX15

742.80

746.36

-0.48%

-2.48%

.SOFIX

Sofia

.SOFIX

568.97

569.92

-0.17%

-4.29%

BONDS

Yield

Yield

Spread

Daily

(bid)

change

vs Bund

change in

Czech Republic

spread

CZ2YT=RR

2-year

CZ2YT=RR

1.1430

0.0300

+207bps

+4bps

CZ5YT=RR

5-year

CZ5YT=RR

0.8540

0.0060

+182bps

+2bps

CZ10YT=RR

10-year

CZ10YT=RR

1.0390

-0.0210

+177bps

+1bps

Poland

PL2YT=RR

2-year

PL2YT=RR

1.5410

-0.0210

+247bps

-1bps

PL5YT=RR

5-year

PL5YT=RR

1.6440

-0.0620

+261bps

-5bps

PL10YT=RR

10-year

PL10YT=RR

1.8100

-0.0440

+255bps

-1bps

FORWARD

RATE

AGREEMENT

3x6

6x9

9x12

3M interbank

Czech Rep

CZKFRAPRIBOR=

2.08

1.91

1.75

2.14

Hungary

HUFFRABUBOR=

0.31

0.31

0.32

0.00

Poland

PLNFRAWIBOR=

1.74

1.69

1.62

1.72

Note: FRA quotes

are for ask prices

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

(Reporting by Jason Hovet in Prague, Krisztina Than in Budapest and Alan Charlish and Agnieszka Barteczko in Warsaw; Editing by Alexander Smith)

((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.

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