BUDAPEST, Sept 17 (Reuters) -
The forint retreated slightly on Tuesday and other central European currencies were also little changed, with a weaker dollar lending some support ahead of the U.S. interest rate decision.
The U.S. Federal Reserve's decision on Wednesday could provide cues for the central banks in the region, as central European rate setters assess how much more room they have to ease policy as inflation subsides while an economic recovery sputters.
Markets are increasingly expecting an oversized 50-basis-point rate cut by the Fed this week, weakening the dollar and boosting risk appetite.
The Hungarian forint was down 0.1% against the euro at 394.50 in slow morning trade, holding onto gains posted in the past four sessions.
"In Monday's session the forint briefly firmed past 394 but closed trading in the 394-395 range and that's where it is trading now," brokerage Equilor said in a note.
The Fed's decision could have implications for the Hungarian National Bank, which holds a policy decision meeting next week, and which paused its rate cuts in August.
Czech National Bank board member Jan Kubicek told Reuters on Monday that he favours another quarter-point rate cut this month given soft economic data, a slightly firmer currency, near-target inflation and lower wage growth.
The Czech central bank slowed the pace of easing to 25 bps in August, from previous 50-bp steps, bringing the main repo rate down to 4.50%.
In Poland, the zloty also slipped 0.1% to 4.28 per euro.
"The financial markets are waiting for the outcome of the two-day Fed meeting starting today. Market participants remain divided on the scale of a possible interest rate cut in the U.S., with a move of 50 basis points currently considered more likely," Bank Millennium said in a report.
"The EUR/PLN exchange rate is stabilizing around 4.28, which is what we have become accustomed to in recent weeks."
CEE SNAPSHOT AT
MARKETS 0915
CET
CURRENCIES
Latest Previo Daily Change
us
trade close change in 2024
Czech <EURCZK 25.1600 25.158 -0.01% -1.82%
crown => 0
Hungary <EURHUF 394.5000 393.95 -0.14% -2.87%
forint => 00
Polish <EURPLN 4.2805 4.2770 -0.08% +1.50%
zloty =>
Romania <EURRON 4.9737 4.9730 -0.01% +0.01%
n leu =>
Serbian <EURRSD 116.9500 117.05 +0.09% +0.25%
dinar => 00
Note: calculated from 1800 CET
daily
change
Latest Previo Daily Change
us
close change in 2024
Prague 1575.28 1576.5 -0.08% +11.40
100 %
Budapes 72908.30 72750. +0.22% +20.27
t 50 %
Warsaw <.WIG20 2310.96 2294.7 +0.71% -1.37%
> 6
Buchare 17554.26 17532. +0.13% +14.20
st 29 %
Spread Daily
vs Bund change
in
Czech spread
Republi
c
<CZ2YT= 3.2480 0.0090 +109bps +3bps
2-year RR>
<CZ5YT= 3.4640 NULL +150bps #VALUE!
5-year RR>
<CZ10YT 3.6740 -0.011 +158bps +2bps
10-year =RR> 0
Poland
<PL2YT= 4.6140 -0.003 +246bps +2bps
2-year RR> 0
<PL5YT= 5.0070 0.0140 +304bps +4bps
5-year RR>
<PL10YT 5.2870 -0.006 +320bps +3bps
10-year =RR> 0
FORWARD RATE
AGREEMENTS
3x6 6x9 9x12 3M
interba
nk
Czech <CZKFRA 3.82 3.43 3.09 4.32
Rep ><PRIBO
R=>
Hungary <HUFFRA 6.56 6.07 5.56 6.47
><BUBOR
=>
Poland <PLNFRA 5.74 5.26 4.64 5.87
><WIBOR
=>
Note: are for ask prices
FRA
quotes
************************************************
**************
(Reporting by the Budapest, Prague and Warsaw bureaus Editing by Eileen Soreng)
((krisztina.than@thomsonreuters.com))
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