FX softens as markets fret over global growth



By Alan Charlish

WARSAW, June 24 (Reuters) - Central European currencies were mostly a touch weaker on Friday, at the end of a week in which fears that aggressive monetary policy tightening could tip the global economy into recession weighed on foreign exchange markets.

The region's rate-setters embarked on a tightening cycle last year to tame some of the highest inflation on the continent, but with major central banks now also turning more hawkish fears of a global economic slump have shaken markets.

"If you look at the currencies, especially the forint and zloty, recently they have been moving pretty much in tandem so it seems that... no local factors are priced in, it is only the global sentiment, which has started to sour," said Piotr Poplawski, senior economist at ING in Warsaw.

At 0851 GMT the Polish zloty EURPLN= was 0.13% weaker against the euro at 4.7135, while the Hungarian forint EURHUF= softened 0.22% to 400.85.

"The forint is underperforming its peers as it is also pressured by a twin deficit as well as the fact that there is still no agreement on EU recovery funds... there is just no good news to support the forint," said an FX trader in Budapest.

The forint has been the worst performer among its CEE peers this year, losing more than 7.8% versus the euro since the start of 2022 and fell to a record low of 403 to the euro last week.

The Czech crown was stable at 24.755, shrugging off a fresh fall in Czech consumer confidence.

The Czech central bank delivered a hefty 125-bps rate hike on Wednesday.

After the decision, Governor Jiri Rusnok said the bank's mandate to intervene in currency markets remained in place and the interventions were preventing an undesired weakening of the crown as a supplementary tool to battle inflation.

Analysts say the crown will remain under pressure amid uncertainty around the entry of incoming Governor Ales Michl, who has opposed rate hikes and will lead the bank from July.

CEE

SNAPSHO AT

MARKETS T

1051

CET

CURRENC

IES

Latest Previou Daily

Change

s

bid

close

change in 2022 EURCZK Czech

<EURCZK 24.7550 24.7540 -0.00% +0.47% =

crown

=>

EURHUF Hungary <EURHUF 400.850 399.950 -0.22% -7.85% =

forint

=>

0

0

EURPLN Polish

<EURPLN 4.7135 4.7075 -0.13% -2.60% =

zloty

=>

EURRON Romanian <EURRON 4.9470 4.9484 +0.03% +0.02% =

leu

=>

EURHRK Croatian <EURHRK 7.5280 7.5285 +0.01% -0.14% =

kuna

=>

EURRSD Serbian <EURRSD 117.350 117.430 +0.07% +0.20% =

dinar

=>

0

0

Note:

calculated from

1800

daily

CET

change

Latest Previou Daily

Change

s

close

change in 2022 .PX

Prague

.PX

1273.85 1278.65 -0.38% #VALUE!

00

.BUX

Budapest .BUX

40046.5 39614.0 +1.09% -21.04%

7

0

.WIG20 Warsaw

<.WIG20 1666.85 1654.32 +0.76% -26.47%

>

.BETI Buchares .BETI 12333.5 12251.3 +0.67% -5.57%

t

6

3

.SBITO Ljubljan <.SBITO 1132.39 1132.41 -0.00% -9.80% P

a

P>

.CRBEX Zagreb

<.CRBEX 2003.93 1996.71 +0.36% -3.63%

>

.BELEX Belgrade <.BELEX 831.16 830.78 +0.05% +1.26% 15

15>

.SOFIX Sofia

<.SOFIX 611.08 606.43 +0.77% -3.87%

>

Yield

Yield

Spread Daily

(bid)

change vs Bund change

in

Czech

spread

Republic

CZ2YT=

2-year <CZ2YT= 6.2640 0.0000 +545bp

-1bps RR

RR>

s CZ5YT=

5-year <CZ5YT= 5.5390 -0.0900 +437bp -10bps RR

RR>

s CZ10YT

<CZ10YT 5.0590 -0.1220 +362bp -13bps =RR

10-year =RR>

s

Poland

PL2YT=

2-year <PL2YT= 7.4110 -0.0630 +659bp

-7bps RR

RR>

s PL5YT=

5-year <PL5YT= 7.2070 -0.0620 +604bp

-7bps RR

RR>

s PL10YT

<PL10YT 6.8330 -0.1620 +539bp -17bps =RR

10-year =RR>

s

FORWARD

3x6

6x9

9x12

3M

interba

nk

Czech

<CZKFRA

7.50

7.51

7.31

6.73

Rep

><PRIBO

R=>

Hungary <HUFFRA

9.24

9.72

9.55

7.70

><BUBOR

=>

Poland

<PLNFRA

7.70

7.88

7.78

6.98

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

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

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


Reporting by Alan Charlish in Warsaw, Anita Komuves in Budapest and Jason Hovet in Prague; Editing by Alex Richardson

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