Forint firms ahead of cenbank meeting, Russia-Ukraine tensions cast shadow
By Anita Komuves
BUDAPEST, Jan 25 (Reuters) - The Hungarian forint edged up on Tuesday ahead of another expected rate hike by the central bank, while Russia-Ukraine tensions continued to cast a pall over Central European markets.
The region's currencies and equities were mixed following a sharp global selloff in the previous session due to geopolitical tensions.
"Financial markets remain under the influence of increased risk aversion related to the threat of a military attack by Russia on Ukraine," Bank Millennium wrote in a client note.
Russia has massed tens of thousands of troops near Ukraine's borders, but denies that it plans to invade the country.
Prague's equities .PX added 0.94%, while Budapest .BUX slid 0.4%. Warsaw .WIG20 gained 1.64% and Bucharest .BETI was 2.4% lower.
The Hungarian forint EURHUF= gained 0.22% to trade at 360.85 per euro.
"We see some consolidation, but I'm afraid the Russia-Ukraine crisis will overshadow everything today and the forint could ease more, no matter what the central bank does," an FX trader in Budapest said.
The National Bank of Hungary is set to hold its rate-setting meeting later in the day. A Reuters poll of analysts expects the base rate to be hiked by another 30 basis points to 2.7%, the highest in almost eight years, as the bank fights soaring inflation.
"The important message could be whether the bank's statement mentions the expected path for the one-week deposit rate," brokerage Equilor said.
The NBH left its one-week deposit rate unchanged at 4% at its weekly tenders in the past three weeks, halting a series of rate hikes. The one-week rate is used to tackle short-term market volatility.
Analysts polled by Reuters expect the one-week deposit rate to rise to 4.6% by the end of the second quarter.
The Czech crown EURCZK= gained 0.67% and was trading at 24.455 per euro, regaining some lost ground after weakening sharply in late trading on Monday to its lowest since Jan. 6.
"High volatility seems to be the only consistent theme right now," Komercni Banka rates trader Marek Lesko said in a note.
The Polish zloty EURPLN= slid 0.07% to 4.5765 versus the common currency, extending its losses from the previous session. The Romanian leu EURRON= edged down.
Latest Previou Daily Change
2022 EURCZK Czech
<EURCZK 24.455 24.6180 +0.67 +1.71 =
% EURHUF Hungary <EURHUF 360.85 361.650 +0.22 +2.37 =
% EURPLN Polish <EURPLN 4.5765 4.5735 -0.07% +0.32 =
% EURRON Romania <EURRON 4.9444 4.9441 -0.01% +0.08 =
% EURHRK Croatia <EURHRK 7.5310 7.5275 -0.05% -0.18% =
n kuna =>
EURRSD Serbian <EURRSD 117.52 117.570 +0.04 +0.05 =
Latest Previou Daily Change
1404.3 1391.29 +0.94 #VALUE
51118. 51325.3 -0.40% +0.78
% .WIG20 Warsaw <.WIG20 2205.9 2170.36 +1.64 -2.69%
% .BETI Buchare .BETI 12530. 12838.3 -2.40% -4.07%
.SBITO Ljublja <.SBITO 1279.4 1297.91 -1.42% +1.91 P
% .CRBEX Zagreb <.CRBEX 2107.9 2109.83 -0.09% +1.37
% .BELEX Belgrad <.BELEX 861.71 859.71 +0.23 +4.99 15
% .SOFIX Sofia
<.SOFIX 611.90 609.94 +0.32 -3.74%
(bid) change vs
<CZ2YT= 4.0480 -0.0010 +469b -1bps RR
<CZ5YT= 3.4310 0.0040 +384b -1bps RR
<CZ10YT 3.2200 0.0050 +329b -3bps =RR
<PL2YT= 3.1650 0.0500 +381b +4bps RR
<PL5YT= 3.9670 -0.0150 +437b -3bps RR
<PL10YT 4.0240 0.0540 +409b +2bps =RR
are for ask
Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Aditya Soni
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