WARSAW, July 8 (Reuters) - The zloty firmed on Monday to
a one-month high, outperforming peers in central Europe, as the
prospect of stable interest rates for longer and a weaker dollar
boost the Polish currency.
Hungary's forint saw renewed pressure, as Budapest laid out
government plans seeking a "defence contribution" from banks,
energy firms, and multinational companies.
Last week, National Bank of Poland governor Adam Glapinski
said interest-rate cuts would not happen before 2026 as
inflation is expected to accelerate following the July no-change
decision by rate-setters for a ninth straight month.
In June, Glapinski had expressed hopes that easing could
begin in the mid-2025.
By 0916 GMT, the Polish zloty was up 0.2% to the
euro at 4.2770, a touch off of its strongest standing in over a
month hit earlier in the day.
"The EUR/PLN pair has a significant chance of reaching the
area of 4.25 quite quickly", ING analysts wrote, indicating
that this could happen within "a week or two".
The zloty had traded stronger than 4.25 per euro in May,
posting four-year highs.
"The weaker dollar and the unexpected tightening of the
NBP's rhetoric, which dampens expectations for any rate cuts
this year or even in 2025, help (the zloty)," ING said.
ING analysts said they expect investors to re-open
carry-trade positions in Poland, but pointed at geopolitical
worries related to the U.S. presidential election as a risk
factor.
The Czech crown held steady at 25.1630 per euro,
within its narrow range since the beginning of July, after
falling from five-month highs in early June.
"CNB (Czech National Bank) has cut the rate by more than
expected even while highlighting upside risk to inflation during
H2," Commerzbank said in a report.
"This confirmed a less hawkish 'reaction function' under
governor Ales Michl which will likely weigh on crown valuation
over the coming year."
Minutes from the CNB's late-June policy meeting, released on
Monday, quoted governor Ales Michl as saying that at coming
meetings the board should discuss the option of slowing the
decline in rates or stabilising rates for some time.
Czech rate-setters cut borrowing costs more than expected
last month, but signalled a likely slowdown in the pace of
easing amid lingering inflation pressures.
Meanwhile the forint retreated 0.5% to 394.30 per
euro from its strongest level in nearly a month, seen on Friday.
Markets are waiting for June inflation data, with a Reuters
poll consensus expecting the pace of consumer price growth and
core CPI growth to remain unchanged at 4.00%.
In mid June, Hungary's central bankers conducted their
smallest rate cut in the 14-month-old easing cycle and said the
scope for more easing in the second half would be extremely
narrow.
"The forint firmed below 392 in the morning, and the started
to weaken ... when the government presser started, so it could
be reacting to the new higher tax on banks," an FX trader in
Budapest said.
"At the same time, we could also say that it firmed as far
as it could and then we see a correction because it weakened as
fast as it firmed before. Liquidity is very low, it is July, and
this causes bigger swings. Also, everyone is looking ahead to
CPI data tomorrow."
CEE SNAPSHOT AT
MARKETS 1116
CET
CURRENCIES
Latest Previo Daily Change
us
trade close change in 2024
Czech 0
Hungary 00
Polish
Romania
Serbian 00
Note: calcula 1800 CET
daily ted
change from
Latest Previo Daily Change
us
close change in 2024
Prague 1572.97 1572.1 +0.05% +11.24
900 %
Budapes 71171.85 72132. -1.33% +17.41
t 83 %
Warsaw <.WIG20 2521.88 2518.8 +0.12% +7.64%
> 9
Buchare 18414.65 18442. -0.15% +19.80
st 43 %
Spread Daily
vs Bund change
in
Czech spread
Republi
c
Poland
0
0
0
FORWARD RATE
AGREEMENTS
3x6 6x9 9x12 3M
interba
nk
Czech
Hungary
Poland
Note: are for
FRA ask
quotes prices
****************************
****************************
******
(Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague,
Anita Komuves and Boldizsar Gyori in Budapest; Editing by Arun
Koyyur)
Zloty marches back to highs, forint faces renewed pressure
July 08, 2024 at 06:11 am EDT
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