CEE MARKETS-Zloty hits 2-month low as FX retreat continues
16/01/2024 10:24
PRAGUE, Jan 16 (Reuters) - The Polish zloty retreated
further on Tuesday, slipping to a two-month low to lead central
Europe's currencies down amid a risk-off trading mood, and as
political battles in Warsaw keep investors cautious.
The zloty's reversal comes after it posted its biggest
quarterly gain in over a decade to end 2023, gaining more than
6%. Some dealers have said a correction was due. The weakening
to start 2024 has brought the zloty to its weakest point since
mid-November.
It EURPLN= traded at 4.395 to the euro on Tuesday, down
0.55% on the day.
"Today we are clearly seeing risk aversion on the global
market: stock exchanges are down, the eurodollar is down. All
this shows that risk appetite is in retreat," a Warsaw-based
dealer said.
On the domestic front, investors are watching Warsaw's new
pro-European government battle with the country's president, who
is an ally of the previous ruling party, the nationalist Law and
Justice (PiS).
On Monday, a top Polish court moved to block the dismissal
of a senior prosecutor accused by critics of taking part in
politicising the country's legal system, underlining the
challenges the government faces delivering reforms needed to get
EU funds held up in years of rule of law disputes.
Polish yields were also up, climbing for a second straight
day and up over 20 basis points since Friday. A Polish central
banker was quoted as saying over the weekend the central bank
(NBP) could have to cut its position in some bonds.
"It may turn out that when such high demand appears, the NBP
will have to consider shortening its position in COVID bonds and
sell some of these securities on the market to collect the money
surplus," MPC member Ireneusz Dabrowski was quoted by PAP news
agency on Saturday as saying.
Elsewhere, Hungary's forint EURHUF= was also on the back
foot, losing 0.3% on the day to 380.30 to the euro. The forint
has been on a downward slope since last week, with data showing
inflation falling quicker than expected, which could open space
for more aggressive interest rate cuts.
Hungary's central bank has been the quickest in central
Europe in easing tight monetary policy as inflation moves closer
to target after a surge to double-digit rates in the past couple
of years.
In the Czech Republic, the crown EURCZK= has been stuck
around 1-1/2 year lows - around 24.70 per euro - since the
central bank started its rate-cutting cycle last month.
Dealers say the crown was looking for a new impulse, which
could come in the following weeks in the build-up to the next
policy meeting in February.
On stock markets, shares in Hungarian telecoms firm Magyar
Telekom MTEL.BU outperformed - and traded at their highest
level since 2010 - after it said it would raise its prices by
15% from March, adjusting its fees to last year's inflation
rate.
CEE SNAPSH AT
MARKETS OT 1102
CET
CURREN
CIES
Latest Previo Daily Change
us
trade close change in 2024
EURCZK Czech 0 0
EURHUF Hungary 00 00
EURPLN Polish
EURRON Romania
EURRSD Serbian 00 00 %
Note: calculated from 1800
daily CET
change
Latest Previo Daily Change
us
close change in 2024
.PX Prague .PX 1450.1 1457.2 -0.49% +2.55%
1 800
.BUX Budapes .BUX 63299. 63787. -0.76% +4.42%
t 33 07
.WIG20 Warsaw <.WIG20 2197.8 2216.0 -0.82% -6.19%
> 7 1
.BETI Buchare .BETI 15777. 15803. -0.17% +2.64%
st 06 32
Spread Daily
vs change
Bund in
Czech spread
Republi
c
CZ2YT= ps
CZ5YT= ps
CZ10YT ps
Poland
PL2YT= ps
PL5YT= ps
PL10YT ps
FORWARD
3x6 6x9 9x12 3M
interba
nk
Czech
Hungary
Poland
Note: are for ask
FRA prices
quotes
****************************************
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(Reporting by Jason Hovet in Prague, Karol Badohal in Warsaw,
Anita Komuves in Budapest; Editing by Alison Williams)
((jason.hovet@thomsonreuters.com))
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