The dollar lost 0.9% against the euro on Wednesday, its sharpest drop in a month. A weaker dollar usually boosts appetite in the European Union's emerging east. The Hungarian forint was leading losses at 0835 GMT, falling 0,44% to 374.500 per euro, but it is still up 6,7% in 2023, supported by the highest interest rates in the European Union and hopes for the release of EU funds for Hungary.
Falling investment hurt Hungary's economy in the fourth quarter as it slipped into a technical recession, a breakdown of the data showed on Thursday, with high interest rates and inflation hitting growth in central Europe. The National Bank of Hungary (NBH) decided to leave the benchmark interest rate steady at 13% on Tuesday, defying government pressure to cut the cost of credit. "Both the Czech and the Hungarian central banks have recently sent out hawkish messages about keeping rates high for an extended period, arguing against assuming that they will cut rates during H2," Commerzbank said in a daily note.
"In contrast, (the Polish central bank) has been relatively dovish, with government officials there demanding rate cuts too; and the situation with respect to EU funding has not improved because the president refused to sign the judicial reform bill." The Polish currency was down 0.1% at 4.6750 per euro, while the Czech crown lost 0.23% to trade at 23.4180. The Romanian leu was stable at 4.9220 per euro. Bank Millennium analysts said the zloty could consolidate at around 4.67 per euro on Thursday and that they did not expect any major moves on the currency this week. The Polish central bank will hold a rate-setting meeting next week. The Warsaw bourse led losses in the region with a fall of 1.63% as State Assets Minister Jacek Sasin reiterated the government was working on a windfall tax which could be applicable to mining companies and refiner PKN Orlen . Prague was down 1%, Budapest was stable and the market in Bucharest rose by 0.5%.
CEE SNAPSHOT AT
MARKETS 0935
CET
CURRENCI
ES
Latest Previou Daily Change s
bid close change in 2023
EURCZK Czech <EURCZK 23.4180 23.3650 -0.23% +3.16%
= crown =>
EURHUF Hungary <EURHUF 374.5000 372.850 -0.44% +6.66%
= forint => 0
EURPLN Polish <EURPLN 4.6750 4.6700 -0.11% +0.31%
= zloty =>
EURRON Romanian <EURRON 4.9220 4.9229 +0.02% +0.42%
= leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05%
= kuna =>
EURRSD Serbian <EURRSD 117.2500 117.295 +0.04% +0.04%
= dinar => 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change s
close change in 2023
.PX Prague 1407.44 1421.38 -0.98% +17.12
00 %
.BUX Budapest 44624.60 44631.0 -0.01% +1.90%
3
.WIG20 Warsaw <.WIG20 1825.96 1856.22 -1.63% +1.89%
>
.BETI Bucharest 12383.13 12314.1 +0.56% +6.17%
4
.SBITO Ljubljana <.SBITO 1195.55 1197.30 -0.15% +13.99
P P> %
.CRBEX Zagreb <.CRBEX 2245.14 2250.80 -0.25% +754.4
> 1%
.BELEX Belgrade <.BELEX 878.79 878.79 +0.00% +6.57%
15 15>
.SOFIX Sofia <.SOFIX 620.58 622.05 -0.24% +3.17%
>
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
Republic
CZ2YT= 2-year <CZ2YT= 6.0250 -0.2320 +281bp -25bps
RR RR> s
CZ5YT= 5-year <CZ5YT= 5.3100 0.0010 +247bp -2bps
RR RR> s
CZ10YT 10-year <CZ10YT 5.0240 0.0270 +228bp +0bps
=RR =RR> s
Poland
PL2YT= 2-year <PL2YT= 6.3760 -0.0730 +316bp -9bps
RR RR> s
PL5YT= 5-year <PL5YT= 6.5570 0.0140 +372bp -1bps
RR RR> s
PL10YT 10-year <PL10YT 6.6060 0.0160 +387bp -1bps
=RR =RR> s
FORWARD
3x6 6x9 9x12 3M interba nk Czech Rep <CZKFRA 7.22 7.15 6.73 7.20 ><PRIBO
R=>
Hungary <HUFFRA 14.57 13.02 11.67 16.29 ><BUBOR
=>
Poland <PLNFRA 7.08 7.08 6.83 6.94 ><WIBOR
=>
Note: FRA are for ask
quotes prices
**********************************************
****************
(Reporting by Anna Wlodarczak-Semczuk in Warsaw and Karol Badohal in Gdansk, Jason Hovet in Prague and Gergely Szakacs in Budapest; Editing by Alexander Smith)
Messaging: anna.wlodarczak.thomsonreuters.com@reuters.net))