CEE MARKETS-Forint touches 2-1/2 month low as FX weakens amid global COVID rise

  • 7/19/2021
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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. CEE SNAPSHO AT MARKETS T 1104 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: calculated from 1800 daily CET change STOCKS Latest Previou Daily Change s close change in 2021 .PX Prague 1193.34 1197.47 -0.34% +16.18 00 % .BUX Budapest 47650.6 48003.2 -0.73% +13.16 8 5 % .WIG20 Warsaw <.WIG20 2223.42 2258.10 -1.54% +12.07 > % .BETI Buchares 11990.0 12026.8 -0.31% +22.28 t 5 0 % .SBITO Ljubljan <.SBITO 1151.79 1156.74 -0.43% +27.86 P a P> % .CRBEX Zagreb <.CRBEX 1925.39 1934.31 -0.46% +10.70 > % .BELEX Belgrade <.BELEX 770.30 768.43 +0.24% +2.90% 15 15> .SOFIX Sofia <.SOFIX 567.97 566.04 +0.34% +26.91 > % 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, Alicja Ptak in Warsaw; Editing by Kirsten Donovan)

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