CEE MARKETS-Zloty, Forint hit new highs as investors bet on weaker dollar

WARSAW, May 15 (Reuters) - The Polish zloty and Hungarian forint touched new highs on Monday, as investors continued to bet that a weaker dollar would boost regional currencies. The Polish zloty hit a 15-month high, and brushed a psychological level of 4.50 per euro, before backing off slightly to 4.5050, up 0.36% by 0923 GMT. "We have this regional firming trend, which is dominant here. The local situation is being rather ignored," said ING Bank Slaski economist Piotr Poplawski. "The sentiment that is being played is rather that the dollar will be weaker in the second half, so probably the CEE currencies will be stronger - that's the main story." Poplawski also said investors were ignoring local factors, which for Poland included still frozen European Union (EU) recovery funds, an upcoming ruling on forex mortgages from the Court of Justice of the European Union (CJEU) and the ruling party's spending plans. On Sunday, Poland's ruling party promised to significantly increase its flagship child benefit handouts, in addition to other measures as it seeks reelection this fall. Ipopema Securities economist Marcin Sulewski pointed out that the result of Turkish elections still remained uncertain, but it might end up temporarily weighing on Europe's emerging currencies. The Hungarian forint gained 0.23% to 369.4000 per euro, after briefly firming to its strongest level since last April. "(The forint) continued where it stopped on last Friday. Given the high quick deposit rate (18%), that means a slow strengthening over time," a Budapest-based trader said.

Elsewhere, the Czech crown edged up 0.06% to 23.6000, as falling inflation and new fiscal cuts reduced chances for rate hikes. Blue-chip indices were up 0.3% in Warsaw and 0.1% in Budapest, while Prague slumped 0.8%, dragged mainly by CEZ electricity producer, which analysts said was an apparent correction after earlier gains.

CEE SNAPSHOT AT

MARKETS 1123 CET

CURRENCI

ES

Latest Previous Daily Change bid close change in 2023 Czech 23.6000 23.6150 +0.06% +2.36% crown
Hungary 369.4000 370.2500 +0.23% +8.13% forint
Polish 4.5050 4.5210 +0.36% +4.10% zloty
Romanian 4.9359 4.9296 -0.13% +0.13% leu
Serbian 117.2000 117.2800 +0.07% +0.09% dinar
Note: calculated from 1800 CET
daily
change

Latest Previous Daily Change close change in 2023 Prague 1360.85 1371.710 -0.79% +13.24% 0
Budapest 46076.69 46044.03 +0.07% +5.21% Warsaw 1945.14 1939.03 +0.32% +8.55% Bucharest 12078.84 12039.62 +0.33% +3.56% Ljubljana 1226.28 1216.20 +0.83% +16.92% Zagreb 2259.52 2260.40 -0.04% +759.89 % Belgrade <.BELEX15 918.68 913.04 +0.62% +11.41% >
Sofia 636.84 629.36 +1.19% +5.88%

Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic
2-year <CZ2YT=RR 5.9670 0.3000 +333bps +28bps >
5-year <CZ5YT=RR 4.8980 -0.0470 +266bps -7bps >
10-year <CZ10YT=R 4.4610 0.0250 +217bps +0bps R>
Poland
2-year <PL2YT=RR 5.7980 0.0540 +316bps +3bps >
5-year <PL5YT=RR 5.7900 0.0870 +355bps +6bps >
10-year <PL10YT=R 5.8490 0.1070 +356bps +8bps R>

FORWARD

3x6 6x9 9x12 3M interban k Czech Rep < 7.20 6.73 5.96 7.18 PRIBOR=>
Hungary < 14.50 12.87 11.68 16.18 BUBOR=>
Poland < 6.84 6.55 6.19 6.90 WIBOR=>
Note: FRA are for ask prices
quotes

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(Reporting by Karol Badohal in Warsaw, Boldizsar Gyori in Budapest and Robert Muller in Prague; Editing by Rashmi Aich)

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