CEE MARKETS-Forint hits 1-week high on profit-taking amid risk-off mood

Rainforest Resources

02/08/2022 09:56

PRAGUE, Aug 2 (Reuters) - The Hungarian forint broke to the
strong side of a major level against the euro on Tuesday,
gaining on profit-taking after hitting recent lows, although
pressure on central European currencies remained.
    The region's currencies have been on the back foot due to
souring risk sentiment, with the forint the worst-hit as it
touched record lows in the past month, as economic woes build in
Europe, energy prices soar and fears of Russian gas supplies
being shut off grow. 
    The U.S. dollar is also weighing, drawing interest away from
risk assets as the Federal Reserve tightens policy.
    Weakening purchasing manager indices (PMIs) in central
Europe on Monday added to gloom, and global markets were also on
edge as U.S. House of Representatives Speaker Nancy Pelosi was
expected to visit Taiwan.  urn:newsml:reuters.com:*:nL4N2ZE1UQ
    The forint, though, was able to manage gains in shallow
trading after crossing key levels, a trader said.
    The forint  EURHUF=  was up 0.6% at 396.7 to the euro at
0843 GMT, getting past the psychological 400 level and also
beyond its 50-day moving average, which helped propel it to a
one-week high.
    In Poland, the zloty  EURPLN=  inched up 0.1% to 4.71 per
euro, but was expected to face continued pressure, which was
also seen in stock markets as central European shares dropped
with global peers.
    "The materializing threat of a global recession, coupled
with concerns about disruptions in the transmission of Russian
gas to Europe, will invariably constitute a mix of factors
supporting the maintenance of the risk-off strategy," Bank
Millennium said in its morning trade note.
    Market attention was also turned to the Czech crown
 EURCZK= , which was steady at 24.64 to the euro on Tuesday
before a closely-watched central bank policy meeting on
Thursday.
    The Czech National Bank's (CNB) revamped seven-seat board -
with three new members and a new governor who has opposed rate
hikes - meeting for the first time. 
    While markets are split on whether another rate would be on
the table, analysts also expected debate on an ongoing
intervention mandate the bank has used since May to keep the
crown from weakening. A weaker currency would add to
inflationary pressures.
    "The crown is concentrated on the approaching CNB meeting
where there is a risk of an end to interventions that would
likely lead to significant and sudden weakening," CSOB analysts
said.
    
    
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        1043              
                                     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     1201.61  1206.89   -0.44%  #VALUE!
                                          00           
 .BUX    Budapest   .BUX    42229.3  42265.2   -0.08%  -16.74%
                                  8        4           
 .WIG20  Warsaw    <.WIG20  1722.20  1736.47   -0.82%  -24.03%
                   >                                   
 .BETI   Buchares   .BETI   12476.1  12528.5   -0.42%   -4.48%
         t                        1        5           
 .SBITO  Ljubljan  <.SBITO  1159.15  1159.88   -0.06%   -7.67%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1954.64  1963.90   -0.47%   -6.00%
                   >                                   
 .BELEX  Belgrade  <.BELEX   836.25   839.44   -0.38%   +1.88%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   602.54   602.07   +0.08%   -5.21%
                   >                                   
                                                              
                            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 Pawel Florkiewicz in Warsaw, Editing by Angus MacSwan)
 ((jason.hovet@thomsonreuters.com))
 
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