WARSAW, May 24 (Reuters) - The Hungarian forint hovered
near multi-month highs on Friday, as an easing U.S. dollar gave
Central European currencies more breathing room.
The dollar, which had pushed higher against the euro since
Monday after several weeks of losses, slipped slightly on
Friday.
An easing dollar usually boosts investor sentiment towards
riskier assets and helps emerging market (EM) currencies.
By 0952 GMT, the forint gained 0.3% to 385.60 per
euro, nearing its highest levels since February which it hit on
Tuesday, and was on track for its fifth straight weekly gain.
"I guess it is rather part of some kind of EM sentiment
change... Looking at the eurodollar movements, today you can see
some kind of correction after yesterday's really significant
dollar strengthening," said ING senior economist Peter Virovacz.
"385 could be kind of a strong floor to go through ... A lot
depends, I guess, on today's U.S. data, especially the Michigan
sentiment indicator," he said.
Virovacz added that a further increase in U.S. inflation
expectations would likely have markets focus on the hawkish
Federal Reserve narrative, strengthening the dollar and possibly
turning back the forint.
On Tuesday, Hungary's central bank cut borrowing costs, but
signalled that scope for more easing would be "very, very
limited" amid strong service sector repricing and other risks.
A Budapest-based trader said that in recent days the forint
had seen a technical correction after several failed attempts to
firm past 385.
"Even though the market got entirely what it expected
regarding the size of the rate cut and the communication from
the central bank, there were some stop-loss deals and positions
being closed, which sent the forint to weaker levels," the
trader said.
"Forint buyers returned at levels above 387.... We are back
in the 385-390 range," the trader said, adding that Hungary's
high interest rates continued to support the forint.
The Polish zloty was steady against the euro at
4.2640, hanging off of the Feb. 2020 high of 4.25 which it
touched on Monday.
"The level of 4.25 remains a strong psychological resistance
for the EUR/PLN exchange rate and needs new impulses for a
further decline," Bank Millennium wrote in a note.
On the equities front in Warsaw, discount retailer Pepco
shares surged over 15% after first half earnings
smashed estimates.
Meanwhile the Czech crown also held steady at
24.72 per euro, heading towards ending a five-week firming
streak, but settling off a four-month high hit last week.
CEE MARKETS
SNAPSHOT AT
1152 CET
CURRENC
IES
Latest Previous Daily Change
bid close change in 2024
Czech 24.7200 24.7320 +0.05% -0.07%
crown
Hungary 385.600 386.7000 +0.29% -0.63%
forint 0
Polish 4.2640 4.2620 -0.05% +1.89%
zloty
Romanian 4.9745 4.9750 +0.01% -0.00%
leu
Note: daily
change
calculated
from 1800 CET
Latest Previous Daily Change
close change in 2024
Prague 1561.94 1571.1700 -0.59% +10.46%
Budapest 69262.9 68319.51 +1.38% +14.26%
2
Warsaw 2526.63 2541.37 -0.58% +7.84%
Buchares 17463.1 17435.31 +0.16% +13.61%
t 3
Spread Daily
vs Bund change
in
spread
Czech
Republic
2-year 4.1240 0.0220 +105bps +4bps
5-year 4.1510 0.0390 +151bps +7bps
10-year 4.2850 0.0510 +171bps +8bps
Poland
2-year 5.3840 -0.0110 +231bps +0bps
5-year 5.6370 0.0370 +300bps +6bps
10-year 5.7950 0.0610 +322bps +9bps
(Reporting by Karol Badohal in Warsaw, Gergely Szakacs in
Budapest; Editing by Varun H K)