CEE MARKETS-Crown highest since 2008, forint falls from five-month peak

4ig.

19/01/2023 14:43

(Updates with Crown high)
    By Jason Hovet
       PRAGUE, Jan 19 (Reuters) - The Czech crown rose on
Thursday to its highest level since the 2008 global financial
crisis first hit, continuing a steady climb started at the end
of 2022 that has put it in the lead among central European
currencies.
    Elsewhere, Hungary's forint fell from a five-month peak, and
central Europe's stock markets were on course for their worst
day in over a month, falling 1%-2% to follow European peers
lower as U.S. recession worries tempered risk appetite.
    But the crown  EURCZK=  was a bright spot, along with other
currencies that recovered some ground after earlier weakness.
    The crown is up over 1% already in 2023, building on a 3%
gain seen in 2022. 
    Like others, the crown has been boosted in recent weeks by
falling gas prices, cutting the risk of an energy crunch this
winter. It is getting added support from a central bank pledge
to intervene to prevent weakness, in place since last year.
    The crown traded at 23.900 to the euro at 1417 GMT, the
strongest since the fourth quarter of 2008, when the global
financial crisis that year was starting to gain force.
    A trader said markets were looking to test the 23.900 level.
Interest was coming from local players, another trader said.
    "The retreat in risk aversion associated with the
non-fulfilment of the severe energy crisis scenario and the
recovery in foreign trade with the euro area amid easing of
tensions in supply chains in the (last) quarter has helped the
crown,"  Jaromir Gec, an economist with Komercni Banka, said.
    "In our view, the significant gains... at the beginning of
this year are unlikely to be maintained and will be corrected by
the end of the year, especially in the context of the further
narrowing of the interest rate differential." 
    Central banks in the region, after sharp hiking cycles
started in 2021, have shifted into stable rates. It comes as
U.S. and euro zone central banks are tightening, which is
putting pressure on currencies through a reduced rate
differential.
    European Central Bank policymaker Klaas Knot said on
Thursday markets may be underestimating planned rate hikes by
the ECB.
    In Hungary, the forint  EURHUF=  has also fought for gains
this year, following a sharp drop in 2022. It has been helped by
moves late last year by the government to unlock European Union
funds caught in rule-of-law disputes with the EU's executive.
    The forint  EURHUF=  was down 0.6% at 395.50 to the euro on
Thursday after touching its highest since August in the previous
session.
    The Polish zloty  EURPLN=  was steady at 4.712 to the euro,
bouncing off an overnight low of 4.751 after it temporarily
broke out of a tight range it had held for several weeks.
    Markets in central Europe are increasingly taking cues from
global markets. U.S. retail sales posted their biggest drop in
12 months in December, hitting economic momentum in the country
and rattling emerging markets on Thursday.
    In central Europe, decades-high inflation at double-digit
rates - above 20% in Hungary's case - is raising recession
risks. 
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1517              
                                     CET               
                            CURRENC                           
                            IES                        
                            Latest   Previou  Daily    Change
                                     s                 
                            bid      close    change   in 2023
 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   Previou  Daily    Change
                                     s                 
                                     close    change   in 2023
 .PX     Prague     .PX     1267.08  1278.30   -0.88%   +5.44%
                                          00           
 .BUX    Budapest   .BUX    46326.9  46855.5   -1.13%   +5.78%
                                  8        8           
 .WIG20  Warsaw    <.WIG20  1881.67  1913.25   -1.65%   +5.00%
                   >                                   
 .BETI   Buchares   .BETI   12085.1  12077.2   +0.07%   +3.61%
         t                        4        1           
 .SBITO  Ljubljan  <.SBITO  1109.00  1108.41   +0.05%   +5.74%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  2059.70  2068.45   -0.42%   +683.8
                   >                                        4%
 .BELEX  Belgrade  <.BELEX   833.05   831.64   +0.17%   +1.02%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   614.40   613.54   +0.14%   +2.15%
                   >                                   
                                                              
                            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                                    
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech                                      
         Hungary                                     
         Poland                                      
         Note:     are for                                    
         FRA       ask                                 
         quotes    prices                              
         ***********************************                  
         ***************************                   
 (Reporting by Jason Hovet in Prague and Anna Wlodarczak-Semczuk
in Warsaw; Editing by Krishna Chandra Eluri)
 ((jason.hovet@thomsonreuters.com))
 
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