PRAGUE, July 19 (Reuters) - Central Europe"s currencies fell
on Monday, starting the week on a sour note amid global market
weakness as coronavirus cases rise in different parts of the
world, with the Hungarian forint touching a fresh 2-1/2 month
low.
The poor sentiment in markets added to local factors that
have pressured both the forint and the Polish zloty.
Political battles between Budapest and Warsaw and the
European Union"s executive in Brussels, which opened cases
against both countries last week over LGBT issues, have raised
risks to EU funding and unnerved investors.
On Monday, the forint lost 0.2% to 360.29 against
the euro and the zloty fell 0.1% to 4.587.
"The zloty has deepened losses against major currencies in
recent days due to deteriorating global market sentiment," bank
PKO BP said.
"The spreading Delta variant of the coronavirus raises
concerns about the future economic growth of EU countries and
the renewal of restrictions against it."
Many countries, particularly in Asia, are struggling to curb
the highly contagious variant of the virus.
The zloty has also felt pressure as the Polish central bank
maintains its loose monetary policy while Hungarian and Czech
peers start tightening rates to get a handle on elevated
inflation. Prices pressures have hit central Europe while
economies rebound and labour shortages reappear.
In a weekend interview with daily Pravo, Czech central bank
Governor Jiri Rusnok said the bank could raise rates again when
it meets in August, backing expectations already priced in by
markets.
The crown, though, failed to get a boost from his
comments and had eased 0.3% by 0904 GMT.
Bank CSOB analysts said with data limited before the next
meeting, the crown - which was at 15-month highs a month ago as
markets anticipated rate hikes over the next year - would take
cues from the global mood.
The Prague stock exchange, which hit its highest in a decade
last week, fell 0.3%, retreating with others in the
region. Warsaw led losses, falling 1.5%.
Shares in Polish wind and solar farm builder Onde,
a unit of construction group Erbud, rose 15% on their
stock market debut in Warsaw on Monday.
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