Forint hits fresh record low, stocks under pressure



(Corrects paragraph 5 to show forint drop is since start of 2022, not 2021)

PRAGUE, Oct 3 (Reuters) -

Hungary's forint fell to a fresh record low on Monday, staying under pressure amid worries over EU funds and energy prices, although other central European currencies found slight relief after the U.S. dollar lost some of its recent strength.

The Polish zloty EURPLN= was up 0.3% at 4.838 to the euro at 1010 GMT, while the Czech crown EURCZK= was steady 24.55 and Romania's leu EURRON= traded unchanged near 4.948.

But stock markets fell as much as 2%, led by Warsaw .WIG20 , along with European peers as economic outlooks stayed in focus and kept pressure on the region.

In central Europe, purchasing manager indices (PMIs) showed a choppy economic landing ahead, with Hungary's manufacturing sentiment signalling a contraction in September for the first time in 17 months.

The forint EURHUF= has dropped more than 12% since the start of 2022, hitting a record low last week amid worries over Europe's energy crisis hitting hard and after the central bank signalled the end of sharp interest rate hikes.

Pressure on the forint is also higher compared to peers while Hungary stays in dispute with the European Union, holding up funds' disbursement.

On Monday, it had dropped 0.6% to 425.2 to the euro, heading past an all-time low of 425 hit on Thursday.

Analysts said the currency remained vulnerable.

"The forint is still under heavy pressure by the current account deficit caused by

energy prices, which causes a constant demand for foreign currencies, which could be balanced out by access to European Union funds," Takarekbank said.

"So, it does not matter that the base rate is the highest [in the region] and the real interest rate is the lowest, it can hardly support the forint."

The Hungarian central bank last week lifted its base rate to 13% with a 125-basis-point move. In Poland, analysts expect a milder hike on Wednesday this week, forecasting a rise of 25 basis points to 7.00%.

But markets will be keen on the message after the decision. Central banks in Hungary and the Czech Republic are signalling an end to rate hikes as economies slow.

"We believe that the (central bank) meeting may support the stabilization of the zloty, but it is hard to expect a significant appreciation of the Polish currency, especially as the recent sell-off was motivated by global factors," Polish bank PKO BP said.

"We expect the EUR/PLN rate to stay above 4.80 in the coming week."

CEE

SNAPSHO AT

MARKETS T

1210

CET

CURRENC

IES

Latest Previou Daily

Change

s

bid

close

change in 2022 EURCZK Czech

<EURCZK 24.5500 24.5740 +0.10% +1.31% =

crown

=>

EURHUF Hungary <EURHUF 425.200 422.500 -0.63% -13.13% =

forint

=>

0

0

EURPLN Polish

<EURPLN 4.8375 4.8515 +0.29% -5.10% =

zloty

=>

EURRON Romanian <EURRON 4.9475 4.9495 +0.04% +0.01% =

leu

=>

EURHRK Croatian <EURHRK 7.5280 7.5225 -0.07% -0.14% =

kuna

=>

EURRSD Serbian <EURRSD 117.220 117.340 +0.10% +0.31% =

dinar

=>

0

0

Note:

calculated from

1800

daily

CET

change

Latest Previou Daily

Change

s

close

change in 2022 .PX

Prague

.PX

1109.05 1123.37 -1.27% #VALUE!

00

.BUX

Budapest .BUX

37582.4 37838.3 -0.68% -25.90%

6

0

.WIG20 Warsaw

<.WIG20 1353.17 1377.91 -1.80% -40.31%

>

.BETI Buchares .BETI 10686.9 10639.4 +0.45% -18.18%

t

7

1

.SBITO Ljubljan <.SBITO 956.74 963.07 -0.66% -23.79% P

a

P>

.CRBEX Zagreb

<.CRBEX 1894.68 1906.28 -0.61% -8.88%

>

.BELEX Belgrade <.BELEX 825.23 827.37 -0.26% +0.54% 15

15>

.SOFIX Sofia

<.SOFIX 568.13 587.15 -3.24% -10.63%

>

Yield

Yield

Spread Daily

(bid)

change vs Bund change

in

Czech

spread

Republic

CZ2YT=

2-year <CZ2YT= 6.0370 -0.2170 +428bp -20bps RR

RR>

s CZ5YT=

5-year <CZ5YT= 5.5410 0.0190 +359bp

+2bps RR

RR>

s CZ10YT

<CZ10YT 5.3450 -0.0350 +324bp

-3bps =RR

10-year =RR>

s

Poland

PL2YT=

2-year <PL2YT= 7.5860 0.0960 +583bp +11bps RR

RR>

s PL5YT=

5-year <PL5YT= 7.4040 -0.0080 +545bp

+0bps RR

RR>

s PL10YT

<PL10YT 7.1860 0.0220 +508bp

+3bps =RR

10-year =RR>

s

FORWARD

3x6

6x9

9x12

3M

interba

nk

Czech

<CZKFRA

7.28

7.17

6.81

7.25

Rep

><PRIBO

R=>

Hungary <HUFFRA

14.26

14.03

13.84

13.42

><BUBOR

=>

Poland

<PLNFRA

7.78

7.88

7.76

7.21

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

********************************************

******************


Reporting by Jason Hovet in Prague, Anita Komuves in Budapest, and Alan Charlish in Warsaw; Editing by Maju Samuel

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