Currencies ease after Fed pushes back rate-cut hopes
By Anita Komuves
BUDAPEST, June 13 (Reuters) -Central European currencies eased on Thursday, with the Hungarian forint leading losses, as riskier assets were under pressure due to the uncertainty after the U.S. Federal Reserve signalled fewer interest rate cuts this year.
The forint EURHUF= slid 0.25% to trade at 395.4 per euro, at a seven-week low.
"It seems like emerging markets are not a priority right now," a Budapest-based forex trader said.
"Risk aversion is still very strong, and apparently the comments after the Fed's decision yesterday also made things even more uncertain, and I do not know when any risk appetite could return."
The Fed held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December, with the central bankers projecting only one quarter-point rate cut this year from three projected in March.
Investors are also eyeing a decision about Hungary's credit rating by ratings agency Fitch due to be published late on Friday, as well as a meeting of the monetary policy council of the central bank scheduled for next Tuesday, traders and analysts said.
"I expect quiet range trading in the forint until the cenbank meeting," another trader in Budapest said.
Elsewhere, the Polish zloty EURPLN= was 0.18% lower and trading at 4.3355 versus the euro.
"The cautious approach of the European Central Bank and the Fed presented in June regarding the rapid easing of monetary policy they take away some of the advantage of the zloty in the form of carry trade changes," Bank Millennium wrote in a note.
"As a result, the Polish currency may anchor at current levels in the coming days."
The Czech crown EURCZK= slid 0.09% to trade at 24.671 to the euro.
Stocks in the region were mixed, with Warsaw's index .WIG20 down 0.87% while Budapest .BUX gained 0.3%.
CEE MARKETS | SNAPSHOT | AT 1042 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 24.6710 | 24.6500 | -0.09% | +0.12% |
Hungary forint | EURHUF= | 395.4000 | 394.4000 | -0.25% | -3.09% |
Polish zloty | EURPLN= | 4.3355 | 4.3275 | -0.18% | +0.21% |
Romanian leu | EURRON= | 4.9775 | 4.9770 | -0.01% | -0.06% |
Serbian dinar | EURRSD= | 117.0300 | 117.0600 | +0.03% | +0.18% |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1537.65 | 1538.3600 | -0.05% | +8.74% |
Budapest | .BUX | 70450.37 | 70237.82 | +0.30% | +16.22% |
Warsaw | .WIG20 | 2421.65 | 2442.89 | -0.87% | +3.36% |
Bucharest | .BETI | 17848.96 | 17788.71 | +0.34% | +16.12% |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 4.1620 | -0.0080 | +117bps | -4bps |
5-year | CZ5YT=RR | 4.1590 | -0.0090 | +156bps | -4bps |
10-year | CZ10YT=RR | 4.2690 | 0.0020 | +171bps | -2bps |
Poland | |||||
2-year | PL2YT=RR | 5.1970 | 0.0670 | +220bps | +4bps |
5-year | PL5YT=RR | 5.5410 | 0.0020 | +295bps | -3bps |
10-year | PL10YT=RR | 5.6890 | 0.0260 | +313bps | +1bps |
FORWARD | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 4.64 | 4.30 | 4.08 | 5.07 |
Hungary | HUFFRABUBOR= | 7.01 | 6.76 | 6.50 | 6.90 |
Poland | PLNFRAWIBOR= | 5.80 | 5.69 | 5.42 | 5.85 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** |
Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Rashmi Aich
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