BUDAPEST/WARSAW — Hungary’s forint
sank to an all-time-low against the euro of 426.45 on
Monday, pressured by dollar gains and expectations of a rise in
inflation to near 20%.
Central Europe’s worst-performing currency, which is down
13% against the euro this year, traded 0.45% lower at 0757 GMT,
underperforming its regional competitors, most of which were
flat to a touch stronger on the day.
The forint has been pressured by Hungary’s reliance on
Russian energy imports, the strength of the dollar, surging
inflation and a rule-of-law row with the European Union that has
Hampered access to billions of euros of funding.
“We are bracing for the 20% inflation figure tomorrow,” a
Budapest-based currency dealer said.
Economists polled by Reuters see September inflation at
19.4% after a surge in energy prices forced Budapest to scrap a
years-long cap on household utility bills.
Data on Monday showed a 1.3 billion deficit in Hungary’s
August trade account as surging energy imports are met with a
slowdown in exports to the euro zone, its main trading partner.
The forint would not recover meaningfully until the EU
gives the green light to renewed money flows, the trader said,
if it finds Hungary’s latest reforms sufficient to allay
long-standing concerns over misuse of funds from the bloc.
“Until that happens, the distrust and lack of confidence in
the forint will not be priced out,” the trader said, adding that
the forint continued to weaken despite gas prices, long a factor
driving its falls, had retreated.
The Polish zloty, meanwhile, eased 0.25% in early
trade, extending weakness since the central bank unexpectedly
paused rate rises last week to assess the impacts of an economic
slowdown on inflation.
“Global investment sentiment remains key, and remains
unfavorable to riskier assets,” Bank Millennium said in a note,
adding that the zloty may breach the weak side of a 4.8 to 4.89
range versus the euro.
The Czech crown, bolstered this year by central
bank interventions, nudged up to an 8-week high on Monday.
“The Czech crown is holding at relatively strong levels and
resisted the high volatility on global markets last week also
due to CNB interventions,” CSOB analysts said.
The Czech central bank has intervened in markets since May,
spending 2.4 billion euros of reserves in August, down from
almost 10 billion in July, data on Friday showed.
CEE SNAPSHO AT
MARKETS T 0957
Latest Preview Daily Change
bid close change in 2022
Note: calculated from 1800
Latest Preview Daily Change
close change in 2022
.PX Prague 1161.21 1168.74 -0.64% #VALUE!
.BUX Budapest 39273.7 39537.6 -0.67% -22.57%
.WIG20 Warsaw <.wig20>
.BETI Buchares 10845.9 10908.7 -0.58% -16.96%
t 1 2
.SBITO Ljubljan <.sbito p a>
.CRBEX Zagreb <.crbex>
.BELEX Belgrade <.belex>
.SOFIX Sofia <.sofix>
Yield Yield Spread Daily
(bid) change vs Bund change
3×6 6×9 9×12 3M
Note: are for ask
(Reporting by Jason Hovet, Anna Wlodarczak-Semczuk and Gergely
Szakacs; Editing by Alexander Smith)