PRAGUE, Jan 19 (Reuters) - The Czech crown edged up to a
two-week high on Tuesday, the biggest mover among central
European currencies, most of which drifted sideways, while stock
markets took a breather after an early-2021 rally.
The crown was up 0.1% at 26.139 to the euro at
0953 GMT, boosted by a weaker dollar that buoyed the region.
The Polish zloty slipped less than 0.1% to 4.534
per euro, after the central bank"s comments last week on the
possibility of further interest rate cuts.
Warsaw stocks lost 0.3%, while Budapest
edged up 0.2% and Prague was virtually flat, giving up earlier
gains.
Stocks have largely paused in a rally seen at the end of
2020 that continued into the early days of the new year.
Currencies have shifted into tight ranges.
Overall, some dealers said trade was shifting to a risk-off
zone, with markets watching what economic toll the latest wave
of the pandemic and the shift to a new U.S. administration in
the White House would have.
"The mood is a bit more risk-averse now, the rally in
emerging stocks stopped, stocks started to move sideways and
currencies followed that," a Budapest trader said.
The Hungarian forint was flat at 359.35 per euro.
Romania"s leu was also flat but trending weaker
after the central bank unexpectedly cut its benchmark interest
rate by a quarter-point to 1.25% on Friday.
A dovish shift in Poland in the past month has also weighed
on the zloty.
Polish central bank governor Adam Glapinski said on Friday
the base scenario was no change in borrowing costs, but he also
said rates could drop below zero if the coronavirus pandemic
causes further, significant damage to the economy.
"We maintain our expectations of stabilisation of the
EUR/PLN exchange rate around 4.53," Bank Millennium said.
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