Czech crown off 22-month high, other CEE currencies ease

  • 12/27/2021
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PRAGUE, Dec 27 (Reuters) - Central Europe"s currencies started the final trading week of 2021 on softer footing, as worries over the economic impact from the Omicron coronavirus variant weighed on global assets, pushing the Czech crown off a 22-month high. The crown had pierced the psychological 25 per euro level — the first time since the start of the COVID-19 pandemic - in thin holiday trade on Friday in the wake of the Czech central bank delivering a third straight hefty interest rate hike last week. It retreated on Monday with rest of central Europe as local markets got back into action. With the Czech central bank leaving scope for further hikes, though, analysts see another test of the 25-level in sight before the year-end. "It is likely the crown will again test 25," CSOB said, adding a real break of that level was possible in the new year. "The rate differential and easing of the pandemic is currently playing into this." Coronavirus infections have eased in the past few weeks in central Europe although the region has yet to really face a spike on Omicron cases like in western Europe. The Czech central bank has been the most aggressive among central Europe"s rate setters this year as the region has turned to sharp policy tightening to tackle soaring inflation at multi-year highs. The crown, in turn, has been the region"s biggest gainer, up over 4.5% since the start of the year. It was down 0.3% at 25.08 to the euro at 0952 GMT. Hungary"s forint has dropped this year despite rising interest rates, with a six-month freeze of retail mortgage rates the latest concern for investors, adding to ongoing risks like Budapest"s disputes with the European Union. On Monday, the forint fell 0.3% to 371.19 to the euro, just off an all-time low of 372. The Polish zloty also slipped 0.1%. Stock markets were mixed, with Warsaw (.WIG20) down half a percent and Prague (.PX) a touch in the red, while Budapest (.BUX) inched up. CEE MARKETS SNAPSHOT AT 1052 CET CURRENCIES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech crown 25.0800 25.0075 -0.29% +4.58% EURHUF= Hungary forint 371.1900 369.9400 -0.34% -2.28% EURPLN= Polish zloty 4.6250 4.6201 -0.11% -1.42% EURRON= Romanian leu 4.9495 4.9498 +0.01% -1.71% EURHRK= Croatian kuna 7.5060 7.5125 +0.09% +0.55% EURRSD= Serbian dinar 117.4800 117.5800 +0.09% +0.08% Note: daily change calculated from 1800 CET STOCKS Latest Previous Daily Change close change in 2021 .PX Prague (.PX) 1423.73 1425.2600 -0.11% +38.61% .BUX Budapest (.BUX) 49803.23 49762.24 +0.08% +18.28% .WIG20 Warsaw (.WIG20) 2215.85 2225.80 -0.45% +11.69% .BETI Bucharest (.BETI) 12671.49 12591.82 +0.63% +29.23% .SBITOP Ljubljana (.SBITOP) 1250.29 1236.74 +1.10% +38.79% .CRBEX Zagreb (.CRBEX) 2047.79 2042.76 +0.25% +17.74% .BELEX15 Belgrade (.BELEX15) 827.43 828.20 -0.09% +10.53% .SOFIX Sofia (.SOFIX) 633.31 633.31 +0.00% +41.51% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech Republic spread CZ2YT=RR 2-year 3.7140 0.0230 +436bps -2bps CZ5YT=RR 5-year 3.2870 0.0090 +378bps +0bps CZ10YT=RR 10-year 2.9710 0.0230 +320bps +0bps Poland PL2YT=RR 2-year 3.1870 -0.0060 +383bps -5bps PL5YT=RR 5-year 3.8740 -0.0120 +437bps -2bps PL10YT=RR 10-year 3.5530 0.0490 +378bps +3bps FRA 3x6 6x9 9x12 3M interbank Czech Rep 4.61 4.13 3.99 4.05 Hungary 5.06 5.18 5.19 4.03 Poland 3.64 3.91 3.92 2.45 Note: FRA quotes are for ask prices **************************************************************

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