Forint leads currencies lower on Nord Stream gas leak worries



By Anita Komuves

BUDAPEST, Sept 28 (Reuters) - The Hungarian forint led losses in central Europe on Wednesday as currencies in the region were pressured by the strength of the dollar and concerns over major leaks into the Baltic Sea from two Russian gas pipelines.

The forint EURHUF= shed 1.17% and was trading at 411.30 to the euro as it ceded gains from the previous session when it firmed after a larger-than-expected 125 bps central bank rate hike to 13%.

The bank also said that it was ending its year-long rate hike cycle amid a slowing economy and that it will focus on liquidity tightening from now on.

Wednesday's weakening was not specific to the forint and was driven by international events, two FX traders in Budapest said. But the central bank's move to end its rate hikes while inflation remains on the rise could leave the currency vulnerable to shifts in global sentiment, some analysts said.

"Cheap FX valuation, a more cautious fiscal stance and high carry, are supportive for FX, but are offset by the challenging external backdrop and now limited monetary policy flexibility," Deutsche Bank wrote in a note.

"We therefore see the 'forced rate hike' scenario as more likely than an end to the tightening cycle."

The forint, which is the most vulnerable in the region to a rise in energy prices, slid alongside its peers on Wednesday as global recession fears, a strong dollar and reports of the gas leaks weighed on emerging currencies.

Europe was investigating the leaks, which Germany, Denmark and Sweden on Tuesday described as "attacks" on the Nord Stream pipelines.

Reports of the gas leaks "led to FX weakness across the region and this theme can be expected to drive the market for the rest of the week", ING wrote in a note.

The Polish zloty EURPLN= weakened 0.5% to 4.8075 per euro while the Czech crown EURCZK= edged down 0.02% to 24.685 versus the European common currency.

Long-term Hungarian government bond yields also rose as they were harried by global market worries and rising core market yields, a fixed-income trader in Budapest said.

The yield on the benchmark 10-year bond was about 9.73%, up 17 basis points from Tuesday's close.

CEE

SNAPSH AT

MARKETS OT

1043

CET

CURREN

CIES

Latest Previo Daily Change

us

bid

close change in

2022 EURCZK Czech

<EURCZK 24.685 24.680 -0.02% +0.76 =

crown

=>

0

0

% EURHUF Hungary <EURHUF 411.30 406.50 -1.17% -10.19 =

forint =>

00

00

% EURPLN Polish <EURPLN 4.8075 4.7835 -0.50% -4.50% =

zloty

=>

EURRON Romania <EURRON 4.9483 4.9470 -0.03% -0.00% =

n leu

=>

EURHRK Croatia <EURHRK 7.5320 7.5285 -0.05% -0.19% =

n kuna =>

EURRSD Serbian <EURRSD 117.24 117.29 +0.04 +0.29 =

dinar

=>

00

00

%

%

Note:

calculated from

1800

daily

CET

change

Latest Previo Daily Change

us

close change in

2022 .PX

Prague

.PX

1144.9 1144.9 +0.00

2

200

% .BUX

Budapes .BUX

37967. 38549. -1.51% -25.14

t

53

03

% .WIG20 Warsaw <.WIG20 1422.3 1458.8 -2.50% -37.26

>

2

1

% .BETI Buchare .BETI 10651. 10773. -1.13% -18.45

st

72

48

% .SBITO Ljublja <.SBITO 971.29 987.18 -1.61% -22.64 P

na

P>

% .CRBEX Zagreb <.CRBEX 1924.5 1935.6 -0.57% -7.44%

>

5

3

.BELEX Belgrad <.BELEX 825.58 831.60 -0.72% +0.58 15

e

15>

% .SOFIX Sofia

<.SOFIX 589.10 591.63 -0.43% -7.33%

>

Yield Yield Spread Daily

(bid) change vs

change

Bund

in

Czech

spread

Republi

c

CZ2YT=

<CZ2YT= 6.1070 0.0130 +416b +6bps RR

2-year RR>

ps CZ5YT=

<CZ5YT= 5.3840 -0.060 +319b -6bps RR

5-year RR>

0

ps CZ10YT

<CZ10YT 5.2510 0.0410 +296b +0bps =RR

10-year =RR>

ps

Poland

PL2YT=

<PL2YT= 7.0300 0.0810 +509b +13bp RR

2-year RR>

ps

s PL5YT=

<PL5YT= 7.2870 0.1440 +510b +15bp RR

5-year RR>

ps

s PL10YT

<PL10YT 7.0970 0.1930 +480b +15bp =RR

10-year =RR>

ps

s

FORWARD

3x6

6x9

9x12

3M

interb

ank

Czech

<CZKFRA

7.26

7.19

6.86

7.24

Rep

><PRIBO

R=>

Hungary <HUFFRA 13.58 13.51 13.14 12.98

><BUBOR

=>

Poland <PLNFRA

7.46

7.56

7.48

7.16

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

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

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


Additional reporting by Pawel Florkiewicz in Warsaw, editing by Mark Heinrich

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.