Forint leads losses as uncertainty over EU deal weighs



By Anita Komuves

BUDAPEST, July 1 (Reuters) - Hungary's forint led losses among its peers on Friday, and neared a record low touched this month, on worries over a lack of an agreement between Hungary and the European Union over pandemic recovery funds.

Markets are seeing low liquidity, with some investors taking profit ahead of an upcoming long weekend in the United States, according to a trader.

The forint EURHUF= fell 0.58% to 399.00 per euro by 0906 GMT, giving up the gains made earlier this week, when it jumped following a massive 185-basis-point interest rate hike by the central bank.

Investors are worried about a row between Hungary and the EU, and that Brussels still has not approved pandemic recovery funds for Budapest. On Wednesday a spokeswoman for the European Union executive said there were "no updates" on granting Hungary access to 15.5 billion euros ($16.2 billion) in COVID-19 economic stimulus funds.

The hike, more than three times what analysts expected, came after the currency fell to a record low of 404.50 versus the euro on Monday. The forint firmed as far as 393.50 this week following the central bank's move, which took the base rate to 7.75%, the highest in the region.

"There is no news behind this weakening (on Friday). The reason for it is that exporters bought euros at the lower price and American investors are closing their positions and taking profit ahead of Monday when U.S. markets will be closed," an FX trader in Budapest said.

"I think the 400-level is very strong at the moment, it could keep the forint from weakening further."

Elsewhere, the Polish zloty EURPLN= slid 0.18% to 4.7175 versus the common currency as a flash CPI reading showed a 15.6% annual increase in prices in May, slightly above expectations.

The Czech crown EURCZK= was flat as new central bank governor Ales Michl said reducing inflation will be the bank's priority.

Fresh PMI data from the region showed manufacturing activity in Poland and the Czech Republic was deteriorating as costs surge. Hungary, however, bucked the trend as PMI rose to 57.0 in June, from 51.9 the previous month.

Stocks in the region were mixed, with Warsaw .WIG20 gaining 1.16% and Budapest .BUX adding 1.31%. Prague .PX slid 0.62%.

CEE

SNAPSH AT

MARKETS OT

1106

CET

CURREN

CIES

Latest Previo Daily Change

us

bid

close change in

2022 EURCZK Czech

<EURCZK 24.750 24.750 +0.00 +0.49 =

crown

=>

0

0

%

% EURHUF Hungary <EURHUF 399.00 396.70 -0.58% -7.42% =

forint =>

00

00

EURPLN Polish <EURPLN 4.7175 4.7090 -0.18% -2.68% =

zloty

=>

EURRON Romania <EURRON 4.9460 4.9470 +0.02 +0.04 =

n leu

=>

%

% EURHRK Croatia <EURHRK 7.5360 7.5325 -0.05% -0.25% =

n kuna =>

EURRSD Serbian <EURRSD 117.30 117.36 +0.05 +0.24 =

dinar

=>

00

00

%

%

Note:

calculated from

1800

daily

CET

change

Latest Previo Daily Change

us

close change in

2022 .PX

Prague

.PX

1243.9 1251.7 -0.62%

9

500

.BUX

Budapes .BUX

39753. 39240. +1.31 -21.62

t

21

53

%

% .WIG20 Warsaw <.WIG20 1715.5 1695.9 +1.16 -24.32

>

6

7

%

% .BETI Buchare .BETI 12397. 12294. +0.84 -5.08%

st

64

26

% .SBITO Ljublja <.SBITO 1119.9 1121.5 -0.14% -10.79 P

na

P>

6

0

% .CRBEX Zagreb <.CRBEX 2005.1 2012.1 -0.35% -3.57%

>

6

3

.BELEX Belgrad <.BELEX 838.12 839.62 -0.18% +2.11 15

e

15>

% .SOFIX Sofia

<.SOFIX 613.51 613.21 +0.05 -3.49%

>

%

Yield Yield Spread Daily

(bid) change vs

change

Bund

in

Czech

spread

Republi

c

CZ2YT=

<CZ2YT= 6.2400 0.1230 +558b +13bp RR

2-year RR>

ps

s CZ5YT=

<CZ5YT= 5.4220 -0.081 +432b -9bps RR

5-year RR>

0

ps CZ10YT

<CZ10YT 4.9050 -0.101 +352b -12bps =RR

10-year =RR>

0

ps

Poland

PL2YT=

<PL2YT= 7.6360 -0.015 +697b -1bps RR

2-year RR>

0

ps PL5YT=

<PL5YT= 7.1340 -0.222 +603b -23bps RR

5-year RR>

0

ps PL10YT

<PL10YT 6.7580 -0.178 +537b -20bps =RR

10-year =RR>

0

ps

FORWARD

3x6

6x9

9x12

3M

interb

ank

Czech

<CZKFRA

7.61

7.57

7.21

7.23

Rep

><PRIBO

R=>

Hungary <HUFFRA 10.17 10.58 10.45

8.45

><BUBOR

=>

Poland <PLNFRA

8.07

8.15

8.06

7.05

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

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

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


Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Amy Caren Daniel

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