CEE MARKETS-Forint regains ground before Hungary rate decision

  • 4/27/2021
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PRAGUE, April 27 (Reuters) - Hungary"s forint edged up on Tuesday and slowed a two-week slide, before a central bank policy meeting at which interest rates are likely to be left unchanged despite upward inflation pressure. Other central European currencies eased as the U.S. dollar hovered above its recent lows and risk appetite eased ahead of a Federal Reserve policy decision this week. The forint has roller-coastered this year, dropping nearly 2% at one point in the past two weeks, which followed a sharp firming after it bounced off all-time lows in March. It was 0.1% up at 363.40 to the euro at 0953 GMT. Hungary"s central bank (MNB) expects headline inflation to approach 5% in the second quarter, well outside the upper bound of a target range. Analysts mostly say the bank will stay cautious on trying to tighten monetary conditions amid an economic recovery from the coronavirus pandemic. "Ahead of the central bank decision in Hungary, investors are assessing whether the MNB will have to support the forint," Erste Group Bank analysts said. "The pressure on the HUF might increase as inflation might surge toward 5% in April." Elsewhere, the Czech crown lost steam, dropping 0.1% to 25.875 to the euro. Markets are expecting the Czech central bank, which meets next week, could begin hiking interest rates later this year although the timing is still uncertain. Board member Vojtech Benda told Bloomberg news agency the bank was not likely to raise rates this year as much as assumed in its staff forecasts. Romania"s leu and the Polish zloty both dipped 0.05%. Warsaw markets were waiting for a Thursday ruling from the Court of Justice of the European Union (CJEU) over questions concerning claims banks may be able to make from clients if foreign currency mortgage contracts are cancelled. The issue, weighing on the zloty, could result in major losses for the banking sector, coming after thousands of Polish borrowers took out Swiss franc loans more than a decade ago. Warsaw"s WIG20 index dropped 0.3% on Tuesday. CEE SNAPSHO AT MARKETS T 1153 CET CURRENC IES Latest Previou Daily Change s bid close change in 2021 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 2021 .PX Prague 1094.56 1095.20 -0.06% +6.56% 00 .BUX Budapest 43304.3 43281.6 +0.05% +2.84% 7 1 .WIG20 Warsaw <.WIG20 1999.52 2005.10 -0.28% +0.78% > .BETI Buchares 11283.0 11213.7 +0.62% +15.07 t 7 5 % .SBITO Ljubljan <.SBITO 1060.52 1063.41 -0.27% +17.72 P a P> % .CRBEX Zagreb <.CRBEX 1893.68 1895.34 -0.09% +8.88% > .BELEX Belgrade <.BELEX 770.34 770.34 +0.00% +2.90% 15 15> .SOFIX Sofia <.SOFIX 520.53 519.88 +0.13% +16.31 > % 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)

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