CORRECTED-CEE MARKETS-Polish zloty firms on rate hike expectations

  • 7/5/2021
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(Corrects exchange rate of Romanian leu in paragraph 7) By Anita Komuves BUDAPEST, July 5 (Reuters) - Central European currencies firmed in low liquidity on Monday as U.S. markets were closed for a holiday, with the Polish zloty outperforming the region supported by the possibility of sooner-than-expected monetary policy tightening in Poland. The zloty was up 0.23%, trading at 4.5070 versus the euro common currency. "Liquidity is so low that it can cause bigger jumps in the rate," an FX trader in Warsaw said. "The zloty is also supported by the central bank governor who on Friday, for the first time, did not exclude the possibility of rate hikes." Governor Adam Glapinski was quoted in an interview as saying that "if there are any reasons, for example when inflation is driven by demand factors, and strong economic growth continues, we will raise rates." Rate hikes in Hungary and the Czech Republic in June fuelled anticipation of sooner-than-expected tightening in Poland as well, which buoyed the zloty in the past two weeks. Central banks in Poland and Romania will announce rate decisions on Thursday, and Glapinski will hold a news conference on Friday at 1300 GMT. The Romanian leu edged up 0.04% to 4.9270. Investors were also eyeing June CPI data in Hungary to be published on Thursday. "If inflation comes in higher than expected, that can strengthen rate hike expectations and could support the currency," an FX trader in Budapest said. Central bank deputy governor Barnabas Virag reiterated on Monday that the National Bank of Hungary would act decisively and the fastest way possible to counter inflation risks. Headline inflation came in at an annual 5.1% in May, below forecasts but above the central bank"s target range of 3% with a tolerance band of a percentage point on either side. The Hungarian forint slid 0.05% on Monday and was trading at 351.69. Markets in the Czech Republic were closed for a national holiday on Monday and Tuesday. Stocks in the region were higher, with Warsaw up 0.33% while Budapest gained 0.24%. Bucharest was 0.43% higher. CEE SNAPSHO AT MARKETS T 1115 CET CURRENC IES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech EURHUF= Hungary 0 EURPLN= Polish EURRON= Romania EURHRK= Croatia EURRSD= Serbian 0 Note: calculated from 1800 daily CET change Latest Previous Daily Change close change in 2021 .PX Prague 1152.13 1152.130 +0.00% +12.17 0 % .BUX Budapes 47633.9 47520.42 +0.24% +13.12 t 1 % .WIG20 Warsaw 2259.50 2252.18 +0.33% +13.89 % .BETI Buchare 11881.8 11830.90 +0.43% +21.17 st 4 % .SBITOP Ljublja <.SBITOP 1125.46 1130.36 -0.43% +24.93 na > % .CRBEX Zagreb 1963.36 1970.32 -0.35% +12.88 % .BELEX1 Belgrad <.BELEX1 772.14 772.39 -0.03% +3.14% 5 e 5> .SOFIX Sofia 544.12 550.76 -1.21% +21.58 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republi c CZ2YT=R s CZ5YT=R s CZ10YT= s Poland PL2YT=R s PL5YT=R s PL10YT= s FORWARD 3x6 6x9 9x12 3M interba nk Czech 1.03 1.33 1.63 0.66 Rep Hungary 1.51 1.86 2.03 1.05 Poland 0.31 0.54 0.77 0.21 Note: are for ask FRA prices quotes ********************************************* ***************** (Editing by Mark Heinrich) Our Standards: The Thomson Reuters Trust Principles.

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