CEE MARKETS-FX gets respite from dollar pressure

WARSAW, Feb 20 (Reuters) - Central European currencies were a touch stronger on Monday after a difficult end to last week when the dollar firmed on expectations the U.S. Federal Reserve would keep tightening policy for longer than initially thought. A slew of data from the world's largest economy in recent weeks pointing to a still-tight labour market, sticky inflation, robust retail sales and higher producer prices, has raised expectations the U.S. central bank has more to do in taming inflation, and that interest rates will have to go higher. U.S. markets were closed for a holiday on Monday. "It seems that CEE currencies are regaining their footing after a really short-term correction or sell-off," said Peter Virovacz, senior economist at ING in Budapest. "We are looking forward to the U.S. dollar running out of steam, the market has now pretty much priced in the upcoming Fed events." A strong dollar is generally negative for central European currencies, as it makes holding riskier assets less attractive. At 1022 GMT, the Hungarian forint was 0.08% stronger against the euro at 383.55. The Polish zloty was 0.23% stronger at 4.7505. "The Polish currency remains under pressure from the strong dollar, but also from local problems," Bank Millennium said in a note, referring to Warsaw's dispute with the European Union over the rule of law which has blocked access to funds. "On the other hand, Monday is a day off from work in the U.S., so we believe that we will wait until tomorrow for greater market emotions." The Czech crown was 0.05% firmer at 23.6940, hovering near 14-year highs hit earlier this month. Czech central bank Vice-Governor Jan Frait was quoted as saying on Monday that monetary conditions were restrictive while rate cuts were still not on the table. "The latest statements from Frait sounded rather positive for the crown, but futher gains for the crown can be rather problematic given the relative strength of the U.S. dollar," CSOB said. CEE SNAPSHO AT

MARKETS T 1122

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.6940 23.7050 +0.05% +1.96% = crown =>
EURHUF Hungary <EURHUF 383.550 383.850 +0.08% +4.14% = forint => 0 0
EURPLN Polish <EURPLN 4.7505 4.7615 +0.23% -1.28% = zloty =>
EURRON Romanian <EURRON 4.9170 4.9100 -0.14% +0.52% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.200 117.325 +0.11% +0.09% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1396.48 1399.25 -0.20% +16.21 00 % .BUX Budapest 45531.7 45626.9 -0.21% +3.97% 8 2
.WIG20 Warsaw <.WIG20 1848.61 1859.26 -0.57% +3.16% >
.BETI Buchares 12351.8 12317.0 +0.28% +5.90% t 6 6
.SBITO Ljubljan <.SBITO 1197.04 1193.09 +0.33% +14.13 P a P> % .BELEX Belgrade <.BELEX 876.08 875.94 +0.02% +6.24% 15 15>
.SOFIX Sofia <.SOFIX 607.53 607.30 +0.04% +1.00% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 5.7330 -0.2700 +286bp -27bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.0970 -0.0540 +258bp -5bps RR RR> s
CZ10YT <CZ10YT 4.7840 -0.0540 +233bp -4bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.4480 0.0130 +357bp +2bps RR RR> s
PL5YT= 5-year <PL5YT= 6.4420 -0.0290 +393bp -2bps RR RR> s
PL10YT <PL10YT 6.4740 0.0000 +402bp +1bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.18 6.99 6.46 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 15.73 13.97 12.67 16.23 ><BUBOR

=>

Poland <PLNFRA 6.97 6.97 6.68 6.93 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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(Reporting by Alan Charlish Editing by Mark Potter)