CEE MARKETS-Forint underperforms ahead of Moody's rating review

By Gergely Szakacs BUDAPEST, March 3 (Reuters) - Hungary's forint fell 0.3% versus the euro on Friday, leading losses among central European currencies ahead of a credit rating review by Moody's after the market close, with analysts saying a cut in the country's rating could be on the cards. At 0859 GMT, the forint traded at 377.55 versus the euro, paring some of its gains for the week, which saw the currency rally to near 10-month highs amid a retreat in the dollar, which generally benefits higher yielding central European units. Friday's review by Moody's follows a move by rival Standard & Poor's to cut Hungary's credit rating to 'BBB-/A-3' from 'BBB/A-2' in January, citing persistently high inflation and external pressures. Fitch has also revised its outlook on Hungary's credit rating to negative from stable this year, citing policy weaknesses in a tough environment. "Given recent decisions of Fitch (change of the outlook to negative) and S&P (downgrade) we cannot rule out a downgrade scenario," economists at Erste Group said in a note. The Czech crown and Hungarian forint's winning runs are losing momentum and set to retreat over the coming months, while the Polish zloty could alone post gains in the coming year, a Reuters poll found. The crown , which rallied near 15-year highs this week, inched lower in early trade after data showing the Czech economy fell a little sharper than expected in the fourth quarter. The Polish zloty , the region's most liquid currency, shed 0.1%, with traders eyeing U.S. data for clues about the Federal Reserve's policy outlook, which can set the course for emerging market currencies. "On Friday, further impulses to increase the volatility of the dollar, and indirectly the zloty, may come from the ISM index reading for US services and a number of evening comments from Fed members," economists at PKO BP said in a note. "(They) should maintain the hawkish tone of recent comments from the Federal Reserve. At the end of the week we expect the EUR/PLN exchange rate to stay close to 4.70." CEE SNAPSHO AT

MARKETS T 0959

CET

CURRENC

IES

Latest Previou Daily Change s

bid close change in 2023 EURCZK Czech <EURCZK 23.4690 23.4600 -0.04% +2.94% = crown =>
EURHUF Hungary <EURHUF 377.550 376.450 -0.29% +5.80% = forint => 0 0
EURPLN Polish <EURPLN 4.7010 4.6950 -0.13% -0.24% = zloty =>
EURRON Romanian <EURRON 4.9210 4.9215 +0.01% +0.44% = leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05% = kuna =>
EURRSD Serbian <EURRSD 117.240 117.285 +0.04% +0.05% = dinar => 0 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change s

close change in 2023 .PX Prague 1417.55 1413.38 +0.30% +17.96 00 % .BUX Budapest 44533.7 44300.6 +0.53% +1.69% 4 1
.WIG20 Warsaw <.WIG20 1834.22 1817.77 +0.90% +2.36% >
.BETI Buchares 12388.8 12367.1 +0.18% +6.22% t 7 4
.SBITO Ljubljan <.SBITO 1197.03 1196.87 +0.01% +14.13 P a P> % .CRBEX Zagreb <.CRBEX 2257.99 2257.37 +0.03% +759.3 > 0% .BELEX Belgrade <.BELEX 879.13 880.08 -0.11% +6.61% 15 15>
.SOFIX Sofia <.SOFIX 624.35 624.35 +0.00% +3.80% >

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
CZ2YT= 2-year <CZ2YT= 6.0870 0.2370 +288bp +24bps RR RR> s
CZ5YT= 5-year <CZ5YT= 5.4610 0.0010 +263bp +1bps RR RR> s
CZ10YT <CZ10YT 5.1300 -0.0110 +239bp +1bps =RR 10-year =RR> s

Poland
PL2YT= 2-year <PL2YT= 6.4020 -0.0310 +319bp -3bps RR RR> s
PL5YT= 5-year <PL5YT= 6.6340 -0.0080 +380bp +0bps RR RR> s
PL10YT <PL10YT 6.6120 -0.0500 +388bp -3bps =RR 10-year =RR> s

FORWARD

3x6 6x9 9x12 3M interba nk Czech <CZKFRA 7.24 7.18 6.82 7.20 Rep ><PRIBO

R=>

Hungary <HUFFRA 14.85 13.32 11.58 16.29 ><BUBOR

=>

Poland <PLNFRA 7.03 7.06 6.80 6.94 ><WIBOR

=>

Note: are for ask

FRA prices

quotes

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(Reporting by Alan Charlish, Jason Hovet and Gergely Szakacs Writing by Gergely Szakacs Editing by Christina Fincher)

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