Currencies ease as dollar gains, Polish and Romanian cbank decisions in focus



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-Currencies ease as dollar gains, Polish and Romanian cbank decisions in focus</title></head><body>

By Krisztina Than

BUDAPEST, Feb 6 (Reuters) -Hungary's forint slipped 0.5% on Monday, as other emerging Central European currencies also eased due to the dollar's gains after upbeat U.S. jobs report doused sentiment.

Investors in the region were awaiting a Polish and Romanian rate meeting later this week to seek clues on how policy makers react to a sharp slowdown in economic growth in late 2022, with inflation still running high.

Analysts said the Polish central bank and the Romanian central bank were both expected to keep their policy rates on hold at a respective 6.75% and 7.0%. The region's central banks have adopted a wait and see approach for now, keeping interest rates stable, as inflation is still strong while economies have stepped on the brakes. nL1N34M0DB

"FX markets are driven by expectations concerning the Fed's rate hikes ...the forint is weakening slightly as the dollar firms and US treasury yields rise," Magyar Bankholding analysts said in a note.

The forint EURHUF=, which tested a fresh eight-month high on Friday before the U.S. data, was down half a percent at 389.45 versus the euro. Its losses in early trade on Monday appeared contained.

"Should the negative international sentiment prevail for longer, the forint could extend losses, aiming for the 396-400 range," brokerage Equilor said in a note.

Other currencies also eased marginally, with the Polish zloty EURPLN= down 0.1%, retreating to 4.7165 per euro.

The zloty is pressured due "to very good data from the U.S. labor market, which strengthens the dollar, and the strengthening of the dollar has never been favorable for currencies in this part of Europe," said Mateusz Sutowicz, financial market analyst at Bank Millennium.

The Czech crown EURCZK= lost 0.2% to 23.80 against the euro. The Czech National Bank left rates at a more than two-decade high as expected last week, while saying rate stability for longer was preferred.

Currencies and bonds in central Europe got a boost last Thursday from a strong euro, which is the region's main reference currency, after the European Central Bank delivered a 50 basis point interest rate hike.

"CEE bonds rallied strongly in reaction to Thursday's ECB meeting," Erste Bank said in a note.

Central Europe's bond yields have dropped sharply to begin 2023 in a debt market rally unlikely to fizzle out this year, as stubborn double-digit inflation is expected to ease, a Reuters poll showed late last month. nL8N34B47E




CEE MARKETS

SNAPSHOT

AT 0935 CET






CURRENCIES







Latest

Previous

Daily

Change




bid

close

change

in 2023

EURCZK=

Czech crown

EURCZK=

23.8050

23.7620

-0.18%

+1.48%

EURHUF=

Hungary forint

EURHUF=

389.4500

387.6000

-0.48%

+2.57%

EURPLN=

Polish zloty

EURPLN=

4.7165

4.7120

-0.10%

-0.57%

EURRON=

Romanian leu

EURRON=

4.8999

4.9000

+0.00%

+0.87%

EURHRK=

Croatian kuna

EURHRK=

7.5330

7.5365

+0.05%

+0.05%

EURRSD=

Serbian dinar

EURRSD=

117.2000

117.3600

+0.14%

+0.09%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2023

.PX

Prague

.PX

1356.92

1355.1000

+0.13%

+12.91%

.BUX

Budapest

.BUX

45144.62

45396.33

-0.55%

+3.08%

.WIG20

Warsaw

.WIG20

1890.38

1906.13

-0.83%

+5.49%

.BETI

Bucharest

.BETI

12305.12

12275.89

+0.24%

+5.50%

.SBITOP

Ljubljana

.SBITOP

1168.94

1163.32

+0.48%

+11.45%

.CRBEX

Zagreb

.CRBEX

2112.32

2112.69

-0.02%

+703.87%

.BELEX15

Belgrade

.BELEX15

865.76

865.76

+0.00%

+4.99%

.SOFIX

Sofia

.SOFIX

611.03

611.28

-0.04%

+1.59%











Yield

Yield

Spread

Daily




(bid)

change

vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

5.7060

-0.0080

+312bps

-5bps

CZ5YT=RR

5-year

CZ5YT=RR

4.8220

-0.0030

+257bps

-6bps

CZ10YT=RR

10-year

CZ10YT=RR

4.3970

0.0030

+215bps

-5bps


Poland






PL2YT=RR

2-year

PL2YT=RR

5.9080

-0.0030

+332bps

-5bps

PL5YT=RR

5-year

PL5YT=RR

5.7360

0.0780

+348bps

+2bps

PL10YT=RR

10-year

PL10YT=RR

5.7390

0.0460

+349bps

-1bps



FORWARD








3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

7.14

6.82

6.16

7.20


Hungary

HUFFRABUBOR=

14.51

12.79

11.47

16.05


Poland

PLNFRAWIBOR=

6.95

6.80

6.39

6.92


Note: FRA quotes

are for ask prices





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






Reporting by Krisztina Than and Anna Koper in Warsaw; Editing by Rashmi Aich

For related news and prices, click on the codes in brackets: All emerging market news EMRG CEEU CEE/ Spot FX rates Eastern Europe spot FX EEFX= Middle East spot FX MEFX= Asia spot FX ASIAFX= Latin America spot FX LATAMFX= Other news and reports World central bank news CEN Economic Data Guide ECONGUIDE Official rates GLOBAL/INT Emerging Diary EMRG/DIARY Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY
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