Thursday, March 28

Hungary’s forint slides as FX pull back from recent gains


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PRAGUE — Hungary’s forint slipped on

Monday and the Polish zloty also eased as a stronger US dollar

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pushed central Europe’s currencies lower.

Following several days of gains, currencies mostly pulled

back as attention turned to a Hungarian central bank meeting on

Tuesday after its policymakers sought to buck up the forint this

month when it fell to record lows.

The forint has gained more than 5% since Hungary’s central

bank announced measures like daily deposit tenders on Oct. 14.

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The bank (MNB) is expected to keep its base interest rate

unchanged at 13% as it seeks to end a more than year-long cycle

of hikes.

“We warned after that meeting that there was a big risk that

the MNB was acting prematurely,” Capital Economics said.

“So far, (new) measures have had the intended effect of

pushing up short-term money market rates and stemming the

downward pressure on the currency.

“As a result, we expect the MNB will leave rates on hold and

reaffirm its commitment to its new tools to limit excessive

falls in the forint.”

The forint had dropped 0.7% to 413.0 to the euro

by 0903 GMT, but stayed well off all-time lows above 434.

The zloty fell 0.4%, remaining on the strong side

of the 4.80 per euro level breached earlier this month. The

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Czech crown was steady at 24.49 per euro, continuing

to find support in a Czech National Bank mandate since May to

intervene in markets to prevent excessive swings.

Stock markets in central Europe were mixed on Monday, with

Warsaw mainly showing gains.

The region’s central banks have sought to cool rate hikes

undertaken since last year as they battle soaring inflation that

has reached double-digit rates.

With high prices and surging electricity bills, economies

are slowing quickly. A monthly Czech statistics office survey on

Monday showed consumer confidence touching a fresh-low.

Markets were also watching global central banks, which have

quickly moved to lift their own rates.

“Ahead of us is an exciting week on the financial markets,

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with the meeting of the European Central Bank, preliminary GDP

and inflation readings from Germany and the US at the fore,”

Bank Millennium in Warsaw said.

“We believe that the high significance of foreign data may –

after two weeks of relative peace for the Euro/dollar – be a

source of indirect volatility for the Polish currency.”

CEE SNAPSHO AT

MARKETS T 1103

CET

CURRENC

IES

Latest Preview Daily Change

s

bid close change in 2022

EURCZK Czech

EURHUF Hungary 0 0

EURPLN Polish

EURRON Romanian

EURHRK Croatian

EURRSD Serbian 0 0

Note: calcula 1800

daily ted CET

change from

Latest Preview Daily Change

s

close change in 2022

.PX Prague 1163.93 1164.33 -0.03% #VALUE!

00

.BUX Budapest 40060.4 40431.9 -0.92% -21.02%

7 7

.WIG20 Warsaw <.wig20>

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.BETI Buchares 10921.8 10875.6 +0.42% -16.38%

t 3 1

.SBITO Ljubljan <.sbito p a>

.CRBEX Zagreb <.crbex>

.BELEX Belgrade <.belex>

.SOFIX Sofia <.sofix>

Yield Yield Spread Daily

(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT= 2-year s

CZ5YT= 5-year s

CZ10YT s

Poland

PL2YT= 2-year s

PL5YT= 5-year s

PL10YT s

FORWARD

3×6 6×9 9×12 3M

interba

nk

Czech

Hungary

Poland

Note: are for

FRA ask

quotes prices

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

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

(Reporting by Jason Hovet in Prague, Gergely Szakacs in

Budapest, and Alan Charlish in Warsaw; Editing by Mike Harrison)

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