PRAGUE, Oct 12 (Reuters) - Central Europe"s currencies
mostly weakened on Tuesday, hit by a stronger U.S. dollar that
cut into risk appetite while a Polish rate hike last week and a
jump in Czech inflation failed to provide further momentum.
Poland"s zloty and the Czech Republic"s crown have been kept
in check by the dollar so far this month - with the greenback"s
strength expected to continue to limit gains seen in the coming
months, according to an October Reuters poll.
That is happening even as the region"s central banks have
largely resumed policy tightening to calm inflation that is
soaring to multi-year highs.
Poland"s central bank surprised markets last week when it
delivered a 40 basis point interest-rate hike, sooner than any
analysts expected.
But the zloty has since slipped back from a three-week high
to levels seen before the Oct 6 rate move. It traded
down a touch at 4.585 to the euro at 0910 GMT on Tuesday.
Political risks were also weighing, after Poland"s highest
court ruled last week that some parts of European Union treaties
are incompatible with the Polish constitution, escalating a
dispute between Brussels and Warsaw.
Bank Millennium said the start of rate hikes would buoy the
zloty even as pressure was likely to remain in the coming days.
"Political factors limit the space for zloty appreciation,
so information from this area may have a clearer impact on zloty
performance," it said.
Similarly, the crown slipped 0.2% to 25.42 to the
euro on Tuesday, a day after data showed September inflation
spiked to a 13-year high, surpassing analysts" expectations. The
central bank said the data pointed to faster rate increases than
its summer forecast had expected.
Forward rates are now pricing in around 100 basis points of
rate hikes at the bank"s final two meetings of 2021, following a
September hike of 75 basis points - the bank"s biggest upward
move in 24 years that caught markets by surprise.
The crown, though, has been stuck in a range between
25.300-25.500 since September.
"The market is already pretty short EURCZK so not much to
add at moment," a dealer said.
Elsewhere, Hungary"s forint also weakened, down 0.2% at
360.05 to the euro, and the Romanian leu nudged lower
despite inflation data surprising on the upside to its highest
in a decade.
CEE SNAPSHO AT
MARKETS T 1110
CET
CURRENC
IES
Latest Previou Daily Change
s
bid close change in 2021
EURCZK Czech
مشاركة :