FX, stocks lifted by global risk-on mood
By Anita Komuves
BUDAPEST, June 21 (Reuters) - Central European currencies and stocks gained on Tuesday as the dollar eased and risk appetite returned to markets after last week's turmoil, when investors were concerned about aggressive interest rate hikes and risks of a global recession.
"CEE currencies strengthened today .... The firming moves coincided with a slightly weaker U.S. dollar and easing of the previous risk-off mood on global markets," Erste Group wrote in a client note.
Hungary's forint EURHUF= added 0.27% and was trading at 396.00 per euro, moving further away from a historic low of 403 that it reached last week.
"We see a bit of a correction and a return of risk appetite after last week's turmoil, but we will have to see whether this mood continues after markets in the U.S. open later today," an FX trader in Budapest said.
U.S. markets were closed on Monday for a holiday.
Hungary's central bank will hold an FX swap tender providing euro liquidity later in the day.
The bank announced in May that in June it would hold a total of four FX swap tenders providing euro liquidity and two short-term discount bill auctions, in order to strengthen the effectiveness of monetary transmission.
The Czech crown EURCZK= was flat ahead of a meeting of the Czech National Bank on Wednesday. Analysts polled by Reuters expect the meeting to result in a 100-basis-point or 125-basis-point rise in the key two-week repo rate, now at 5.75%.
This will be the last meeting of the bank before incoming governor Ales Michl takes over. Michl has consistently voted against rate hikes during the central bank's year-long tightening cycle, which has raised the main rate by a total of 550 basis points.
However, his promise of no more rate hikes will be tested right away by soaring inflation and a hawkish turn among major central banks.
Elsewhere, the Polish zloty EURPLN= added 0.22% and was trading at 4.6390 per euro.
"The zloty continues to strengthen, taking advantage of local factors, i.e. growing expectations for interest rate hikes in Poland ... and another set of probably good data from the domestic economy," Bank Millennium wrote.
Stocks in the region were also higher, tracking European peers, with Warsaw's index .WIG20 leading gains by adding 1.69%.
Latest Previou Daily
in 2022 Czech
<EURCZK 24.689 24.6900
Hungary <EURHUF 396.00 397.050
-6.72% forint =>
Polish <EURPLN 4.6390 4.6510
Romania <EURRON 4.9475 4.9450
+0.01% n leu
Croatia <EURHRK 7.5140 7.5165
+0.05% n kuna =>
Serbian <EURRSD 117.35 117.450
Latest Previou Daily
in 2022 Prague
+1.28% -20.75% t
Warsaw <.WIG20 1708.2 1679.89
Buchare .BETI 12406. 12325.8
Ljublja <.SBITO 1143.6 1150.71
Zagreb <.CRBEX 1992.6 1993.82
Belgrad <.BELEX 834.40 836.00
<.SOFIX 612.41 612.77
(bid) change vs Bund change
<CZ2YT= 6.6640 -0.1730 +553bps
-22bps 2-year RR>
<CZ5YT= 6.2340 -0.0230 +469bps
-10bps 5-year RR>
<CZ10YT 5.7680 0.0510 +400bps
-6bps 10-year =RR>
<PL2YT= 8.3900 0.0380 +725bps
-1bps 2-year RR>
<PL5YT= 8.5850 0.1340 +704bps
+6bps 5-year RR>
<PL10YT 8.1670 0.0230 +640bps
-8bps 10-year =RR>
are for ask
Reporting by Anita Komuves; Additional reporting by Alan Charlish in Warsaw; Editing by Bradley Perrett
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