CEE MARKETS-Forint hits fresh record low, stocks under pressure
03/10/2022 11:33
PRAGUE, Oct 3 (Reuters) -
Hungary's forint fell to a fresh record low on Monday,
staying under pressure amid worries over EU funds and energy
prices, although other central European currencies found slight
relief after the U.S. dollar lost some of its recent strength.
The Polish zloty EURPLN= was up 0.3% at 4.838 to the
euro at 1010 GMT, while the Czech crown EURCZK= was steady
24.55 and Romania's leu EURRON= traded unchanged near 4.948.
But stock markets fell as much as 2%, led by Warsaw
.WIG20 , along with European peers as economic outlooks stayed
in focus and kept pressure on the region.
In central Europe, purchasing manager indices (PMIs) showed
a choppy economic landing ahead, with Hungary's manufacturing
sentiment signalling a contraction in September for the first
time in 17 months. urn:newsml:reuters.com:*:nL1N3140I8
The forint EURHUF= has dropped more than 12% since the
start of 2021, hitting a record low last week amid worries over
Europe's energy crisis hitting hard and after the central bank
signalled the end of sharp interest rate hikes.
Pressure on the forint is also higher compared to peers
while Hungary stays in dispute with the European Union, holding
up funds' disbursement.
On Monday, it had dropped 0.6% to 425.2 to the euro, heading
past an all-time low of 425 hit on Thursday.
Analysts said the currency remained vulnerable.
"The forint is still under heavy pressure by the current
account deficit caused by high energy prices, which causes a
constant demand for foreign currencies, which could be balanced
out by access to European Union funds," Takarekbank said.
"So, it does not matter that the base rate is the highest
[in the region] and the real interest rate is the lowest, it can
hardly support the forint."
The Hungarian central bank last week lifted its base rate to
13% with a 125-basis-point move. In Poland, analysts expect a
milder hike on Wednesday this week, forecasting a rise of 25
basis points to 7.00%. urn:newsml:reuters.com:*:nL8N3114VT
But markets will be keen on the message after the decision.
Central banks in Hungary and the Czech Republic are signalling
an end to rate hikes as economies slow.
"We believe that the (central bank) meeting may support the
stabilization of the zloty, but it is hard to expect a
significant appreciation of the Polish currency, especially as
the recent sell-off was motivated by global factors," Polish
bank PKO BP said.
"We expect the EUR/PLN rate to stay above 4.80 in the coming
week."
CEE SNAPSHO AT
MARKETS T 1210
CET
CURRENC
IES
Latest Previou 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: calculated from 1800
daily CET
change
Latest Previou Daily Change
s
close change in 2022
.PX Prague .PX 1109.05 1123.37 -1.27% #VALUE!
00
.BUX Budapest .BUX 37582.4 37838.3 -0.68% -25.90%
6 0
.WIG20 Warsaw <.WIG20 1353.17 1377.91 -1.80% -40.31%
>
.BETI Buchares .BETI 10686.9 10639.4 +0.45% -18.18%
t 7 1
.SBITO Ljubljan <.SBITO 956.74 963.07 -0.66% -23.79%
P a P>
.CRBEX Zagreb <.CRBEX 1894.68 1906.28 -0.61% -8.88%
>
.BELEX Belgrade <.BELEX 825.23 827.37 -0.26% +0.54%
15 15>
.SOFIX Sofia <.SOFIX 568.13 587.15 -3.24% -10.63%
>
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 ask
FRA prices
quotes
********************************************
******************
(Reporting by Jason Hovet in Prague, Anita Komuves in Budapest,
and Alan Charlish in Warsaw; Editing by Maju Samuel)
((jason.hovet@thomsonreuters.com))
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