PRAGUE, Feb 26 (Reuters) - The Czech crown recovered some
losses against the euro on Friday, after its biggest two-day
slide since October, as a worsening pandemic situation in the
country and around central Europe kept currencies under
pressure.
Hungary"s forint edged up but was near a seven-week low hit
on Thursday. Stocks also slipped around the region, led by a
1.4% fall in Warsaw, following global peers as a rout
in bond markets spooked investors.
Central European bond yields slightly ticked up. The
long-end end of the curve has largely copied global
developments.
The crown had gained 0.2% at 26.16 to the euro by
1021 GMT.
The currency rallied much of February on expectations that
the Czech central bank could begin raising interest rates later
this year, but it lost as much as 1.5% on Wednesday and Thursday
as the government signalled a stricter lockdown was coming.
Czech Prime Minister Andrej Babis said on Thursday that
people"s movement needed to be "radically" limited over at least
the next three weeks to slow one of the world"s fastest spreads
of COVID-19 infections.
His minority government was seeking an extension of
state-of-emergency powers in parliament on Friday.
Dealers said the pandemic situation would keep the crown
weak.
Elsewhere in central Europe, Poland was set to roll back
loosened restrictions in one region, and Hungarian Prime
Minister Viktor Orban said his country could consider tightening
some restrictions as infections were expected to rise
"drastically" in the next two weeks.
The government this week extended a partial lockdown until
March 15.
The forint was flat at 361.05 per euro, while the
Polish zloty also steadied at 4.517.
"The euro/forint rate crossed the 361.50 level, the next
resistance is at 363.15, then at 365," brokerage Equilor said.
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