CEE MARKETS-Currencies steady ahead of Czech rate meeting

OTP Bank Nyrt.

06/08/2025 09:10

By Krisztina Than and Jason Hovet

BUDAPEST/PRAGUE, Aug 6 (Reuters) - Central European currencies were steady on Wednesday as markets digested a mixed set of industrial output and retail data in Hungary and assessed the inflation outlook ahead of a Czech central bank meeting due on Thursday.

The crown EURCZK= held steady around 24.60 per euro, hovering just off an 18-month high of 24.53 hit last month, with eyes on a Czech National Bank meeting on Thursday where policymakers are widely expected to hold off on further rate cuts for a second straight meeting.

Analysts will parse the bank's tone to gauge whether its easing cycle - started in late 2023 - will continue. A Reuters poll last week saw scope for another rate cut later this year, although markets have priced out the chances.

"We continue to expect the CNB to be very cautious with further rate cuts this year, while stability until the end of the year cannot be ruled out," J&T Banka said on the latest inflation data.

Inflation data on Tuesday showed a slight easing in the headline rate but continued pressure in the services sector that rate setters are watching.

ING said in a note that eyes will be on the central bank's new economic forecasts.

"Despite the fact that CZK rates saw higher volatility amid weak summer liquidity, EUR/CZK is surprisingly stable despite the rapid movement in EUR/USD," ING said.

Elsewhere, the forint EURHUF= was flat, trading on the firmer side of the 400 level versus the euro, at around 398.30.

Data earlier on Wednesday showed that Hungary's industrial output fell by an annual 4.9% in June based on preliminary unadjusted data, dragged down by a fall in the vehicle manufacturing industry. As a bit of a silver lining, retail sales rose by an annual 3.0% in June, underpinning expectations that the economy would be supported by household consumption.

The Hungarian central bank only expects 0.8% economic growth this year, while inflation is expected to average 4.7%.

"In the remainder of the year, a positive trend in real wages can be the main engine of consumption growth, although as wage dynamics slow, this impact could gradually fade," Erste Bank analyst Janos Nagy said in a note.

Stock markets in the region were mixed, with the main Prague index .PX 0.3% higher and the Warsaw stock exchange .WIG20 gaining 0.6%, while the market in Budapest .BUX slipped 0.2%.

CEE MARKETS SNAPSHOT AT 0917 CET
CURRENCIES
Latest trade
Previous close
Daily change
Change in 2025
Czech crown
EURCZK=
24.6010
24.5950
-0.02%
+2.47%
Hungary forint
EURHUF=
398.3000
398.2500
-0.01%
+3.30%
Polish zloty
EURPLN=
4.2820
4.2865
+0.11%
-0.12%
Romanian leu
EURRON=
5.0753
5.0758
+0.01%
-1.95%
Serbian dinar
EURRSD=
117.0500
117.1400
+0.08%
-0.09%
Note: daily change calculated from 1800 CET
STOCKS
Latest
Previous close
Daily change
Change in 2025
Prague
.PX
2261.72
2255.6000
+0.27%
+28.49%
Budapest
.BUX
101602.93
101786.08
-0.18%
+28.08%
Warsaw
.WIG20
2883.60
2865.63
+0.63%
+31.55%
Bucharest
.BETI
20345.11
20334.44
+0.05%
+21.68%
BONDS
Yield (bid)
Yield change
Spread vs Bund
Daily change in spread
Czech Rep 2-year
CZ2YT=RR
3.5210
-0.0010
+162bps
-2bps
Czech Rep 5-year
CZ5YT=RR
3.8480
0.0120
+162bps
+0bps
Czech Rep 10-year
CZ10YT=RR
4.2930
0.0040
+165bps
-1bps
Poland 2-year
PL2YT=RR
4.2880
0.0130
+238bps
+0bps
Poland 5-year
PL5YT=RR
4.8600
-0.0080
+263bps
-2bps
Poland 10-year
PL10YT=RR
5.4750
0.0310
+284bps
+1bps
FORWARD RATE AGREEMENTS
3x6
6x9
9x12
3M interbank
Czech Rep
CZKFRA, PRIBOR=
3.54
3.51
3.49
3.50
Poland
PLNFRA, WIBOR=
4.42
4.04
3.75
4.94
Note: FRA quotes are for ask prices

 (Reporting by Jason Hovet in Prague, Krisztina Than in Budapest; Editing by Joe Bavier)

 ((krisztina.than@thomsonreuters.com;))