WARSAW, June 23 (Reuters) - Central European currencies were
firmer on Wednesday, ahead of a Czech central bank meeting that
economists expect will deliver the second rate hike in the
region in as many days.
Central and eastern Europe has the highest inflation in the
European Union, and on Tuesday the Hungarian central bank became
the first in the bloc to launch a cycle of rate hikes to combat
growing price pressures in the aftermath of the COVID-19
pandemic.
It raised its base rate to 0.9% from 0.6%, a slightly bigger
hike than analysts had expected, and said it would review the
need for more hikes on a monthly basis.
Markets expect the Czech central bank will
follow suit with its first rate hike since just before the
pandemic started.
The Czech crown was 0.25% firmer against the euro at 25.454
at 0844 GMT, close to its two-week moving average. It hit
15-month highs on the strong side of 25.30 earlier in June.
Commerzbank said a rate hike was likely, with the majority
on the Czech National Bank (CNB) board not wanting to wait and
that the crown had further room to gain over its forecast
horizon.
"Consumer prices are close to the top end of the CNB target
range, core rate remains above it and producer price momentum
points towards increased price pressure," it said.
The Hungarian forint was the best performing
currency in the region, firming 0.49% to 349.40 after Tuesday"s
rate hike.
"The central bank surprised to the hawkish side by saying
that it will deliver further hikes on a monthly basis ...
Moreover, the statement had a clear hawkish shift in tone as far
as inflation risks are concerned," Morgan Stanley said in a
note.
In Poland, where the central bank has struck a much more
dovish tone than its Czech and Hungarian counterparts, the zloty
was 0.09% firmer at 4.518.
CEE SNAPSHO AT
MARKETS T 1044 CET
CURRENC
IES
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EURCZK= Czech
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