CEE MARKETS-Forint, zloty under pressure in EU budget row

  • 12/8/2020
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PRAGUE, Dec 8 (Reuters) - Hungary"s forint slipped to an 11-day low on Tuesday and Poland"s zloty also fell as a standoff with the European Union over Budapest and Warsaw"s threat to veto the bloc"s budget and recovery fund rattled markets. In Romania, the leu was steady, around 4.873 to the euro, with investors watching political developments. Romanian prime minister Ludovic Orban resigned on Monday after his Liberal party lost Sunday"s election, but his centrist camp appeared in pole position to form a coalition government against the victorious opposition leftists. But eyes were on Hungary and Poland after a senior EU diplomat said the bloc needed a signal on Tuesday they would drop their veto or the bloc would have to set things up without them. Both upheld their veto on Monday evening. The forint fell 0.25% to 360.83 to the euro on Tuesday, breaking to the weak side of its recent range between 356-360 and touching its lowest since Nov. 27. "The forint will keep moving in its downward trend," a Budapest trader said. "Without the political risks, the forint could have ended the year around 350 per euro." Budapest and Warsaw have objected to making the EU money conditional on respect for the rule of law and democratic norms. With worries over the flow of funds amid the global coronavirus pandemic, the risk has been bigger for Hungary because its economy is smaller than Poland"s. A Reuters poll last week showed the forint lagging the zloty and Czech crown next year as economies recover. The leu was also seen weighed down by fiscal risks. The zloty was down 0.2% on Tuesday, at 4.48 to the euro. Commerzbank said the forex market did not look to price in continued deadlock over the EU budget and recovery fund. Budapest stocks rose slightly, untouched by the row. Elsewhere, Prague stocks rose while the crown gained 0.2%, to 26.445 per euro. Czech industry rose in October - when restrictions started amid a large spike in COVID-19 infections - according to data out on Tuesday. With lockdowns not hitting factories in this second wave, analysts expect output will maintain some support. CEE SNAPSHO AT MARKETS T 1042 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 978.22 973.130 +0.52% -12.32% 0 .BUX Budapest 39201.4 39198.3 +0.01% -14.93% 0 1 .WIG20 Warsaw <.WIG20 1942.75 1958.53 -0.81% -9.64% > .BETI Buchares 9457.11 9493.39 -0.38% -5.21% t .SBITO Ljubljan <.SBITO 892.63 895.35 -0.30% -3.59% P a P> .CRBEX Zagreb <.CRBEX 1762.84 1758.09 +0.27% -12.62% > .BELEX Belgrade <.BELEX 713.87 715.26 -0.19% -10.95% 15 15> .SOFIX Sofia <.SOFIX 434.65 433.18 +0.34% -23.50% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year s CZ5YT= 5-year s CZ10YT s Poland PL2YT= 2-year s PL5YT= 5-year s PL10YT s FRA 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest and Alan Charlish in Warsaw; editing by Philippa Fletcher)

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