PRAGUE, Oct 7 (Reuters) - The Hungarian forint hovered at an 18-month low on Monday, the Czech crown sat off a two-month low and the Polish zloty eased for a ninth consecutive session, as dollar strength stayed a drag on central Europe's currencies.
The region has been impacted in the past week by Middle East tensions cutting into risk appetite. On Friday, a U.S. jobs report pointed to a resilient economy and spurred markets to reduce bets of outsized Federal Reserve rate cuts, leaving central Europe once again under pressure from the dollar on Monday.
The crown and forint have been the hardest hit, losing more than 2% and 1%, respectively, in the past two weeks, in the wake of extended interest-rate cutting cycles by the Czech and Hungarian central banks.
The forint had fallen by 0.1% to 401.80 to the euro by 0953 GMT on Monday, off a low of 402.20, as it sat on the weak side of the big psychological level of 400 for a fourth consecutive session.
"In the morning, there was a ray of hope the forint could firm in a correction, but then everything started to weaken again," a Budapest trader said.
"But there is very little activity in the market, and we see a continuous, slow weakening... the forint's rate is determined by the international mood these days."
The crown also lost 0.1%, to 25.354 per euro, and was around its lowest levels since the beginning of August.
The zloty dropped to 4.323 to the euro to touch a three-week low as it has fallen out of a long-held range between 4.25-4.30 in which it had sat since mid-August. The zloty had been trading at four-year highs in July.
"We will look for signs of calm," ING said. "Rate differentials remain at a record high after last week across the board and central bank hawkishness should help erase some losses later."
Despite continued interest rate cuts, Hungarian and Czech central bankers have said they will be cautious about further easing. At the same time, Polish and Romanian central banks stayed on pause at meetings last week.
Investors will turn their focus to upcoming inflation prints, in both central Europe and the United States, to gauge the rate outlook.
"CE3 currencies are being buffeted around by global risk sentiment," Commerzbank said in a note.
"Which way they will move this week is impossible to predict. What one might say, though, is that the currencies are primed for a rebound as soon as global tensions ease and risk assets rally."
CEE SNAPSHOT AT
MARKETS 1153
CET
CURRENCIES
Latest Previo Daily Change
us
trade close change in 2024
Czech <EURCZK 25.3540 25.331 -0.09% -2.57%
crown => 0
Hungary <EURHUF 401.8000 401.35 -0.11% -4.63%
forint => 00
Polish <EURPLN 4.3230 4.3180 -0.12% +0.50%
zloty =>
Romania <EURRON 4.9772 4.9770 -0.00% -0.06%
n leu =>
Serbian <EURRSD 116.9600 117.03 +0.06% +0.24%
dinar => 00
Note: calculated from 1800 CET
daily
change
Latest Previo Daily Change
us
close change in 2024
Prague 1590.39 1591.7 -0.08% +12.47
300 %
Budapes 73643.29 73411. +0.32% +21.48
t 75 %
Warsaw <.WIG20 2279.66 2291.5 -0.52% -2.70%
> 3
Buchare 17464.86 17459. +0.03% +13.62
st 75 %
Spread Daily
vs Bund change
in
Czech spread
Republi
c
<CZ2YT= 3.2990 0.0530 +106bps +2bps
2-year RR>
<CZ5YT= 3.6360 0.1890 +152bps +15bps
5-year RR>
<CZ10YT 3.9560 0.0830 +171bps +6bps
10-year =RR>
Poland
<PL2YT= 4.8890 0.0960 +265bps +6bps
2-year RR>
<PL5YT= 5.1990 0.0800 +309bps +4bps
5-year RR>
<PL10YT 5.4900 0.0470 +325bps +2bps
10-year =RR>
FORWARD RATE
AGREEMENTS
3x6 6x9 9x12 3M
interba
nk
Czech <CZKFRA 3.70 3.42 3.27 4.17
Rep ><PRIBO
R=>
Hungary <HUFFRA 6.13 5.95 5.72 6.31
><BUBOR
=>
Poland <PLNFRA 5.80 5.47 4.91 5.85
><WIBOR
=>
Note: are for ask prices
FRA
quotes
************************************************
**************
(Reporting by Jason Hovet in Prague, Anita Komuves in Budapest, and Wlodarczak-Semczuk in Warsaw; Editing by Krishna Chandra Eluri)
((jason.hovet@thomsonreuters.com))
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