WARSAW, July 16 (Reuters) - The zloty came under
pressure on Tuesday, pulling back from the multi-year highs it
approached in recent days, as steady interest rates amid policy
easing elsewhere continue to prop up the Polish currency.
In early July, Poland's central bank governor said
interest-rate cuts would not happen before 2026, as inflation
was expected to accelerate.
In July the central bank kept interest rates on hold for the
ninth month in a row, with the governor signalling the
possibility of easing from mid-2025.
By 0947 GMT the Polish zloty had shed 0.4% against
the euro, trading at 4.2670.
It had pulled back from the 4.2480 level it touched on
Monday, before retreating, for the second time in the span of
less than a week, a hair off of the more than four-year high of
4.2470 hit in late May.
A Warsaw-based trader said the zloty was under "light
pressure" today, attributing it to some risk off sentiment
hitting emerging market assets, but called 4.25 a "good" support
level.
"Yesterday again saw attempts to bring the euro below 4.25
zlotys. They weren't as successful, probably due to the lack of
strong impulses from core markets and calm trade in the region,"
state-owned development bank BGK said in a note.
"We believe that events on global markets - including the
steepening of the U.S. curve - may currently make strengthening
the zloty more difficult. As a result, today we expect calm
trading on the zloty in the range of 4.25-4.27 zlotys per euro."
The Hungarian forint traded 0.1% lower at 391.75
per euro, largely holding onto gains from the previous sessions.
"I attribute the strengthening of the forint that started on
Friday to global factors," a Budapest-based trader said.
"It is a calm summer trading day, though, with the forint
trading in a tight range between 390.50 and 392. Retail sales
data from the U.S. in the afternoon could move the market a
bit."
Bets for a rate cut by the U.S. Federal Reserve in September
also helped the forint, according to the trader.
Fed chair Jerome Powell said on Monday the three U.S.
inflation readings over the second quarter of this year "add
somewhat to confidence" that the pace of price increases is
returning to the Fed's target in a sustainable fashion, remarks
that suggest a turn to interest rate cuts may not be far off.
National Bank of Hungary (NBH) rate-setters, who have cut
borrowing costs by 1,100 basis points since May 2023, are
scheduled to meet next week, with deputy governor Barnabas Virag
saying on Monday that possible further small reduction in the
base rate is an "open question".
The Czech crown gained 0.1% and traded at 25.3630
per euro, edging away from 3-month lows after
lower-than-expected inflation data last week, which increased
bets on more interest rate cuts ahead.
CEE SNAPSHOT AT
MARKETS 1147 CET
CURRENCI
ES
Latest Previous Daily Change
trade close change in 2024
Czech 25.3630 25.3985 +0.14% -2.61%
crown
Hungary 391.7500 391.3800 -0.09% -2.19%
forint
Polish 4.2670 4.2521 -0.35% +1.82%
zloty
Romanian 4.9651 4.9685 +0.07% +0.19%
leu
Serbian 117.0000 117.0200 +0.02% +0.21%
dinar
Note: calculated from 1800 CET
daily
change
Latest Previous Daily Change
close change in 2024
Prague 1599.99 1600.230 -0.01% +13.15%
0
Budapest 72400.98 72730.44 -0.45% +19.43%
Warsaw 2521.67 2569.86 -1.88% +7.63%
Bucharest 18584.96 18546.14 +0.21% +20.91%
Spread Daily
vs Bund change
in
Czech spread
Republic
2-year
5-year
10-year
Poland
2-year
5-year
10-year
FORWARD
3x6 6x9 9x12 3M
interban
k
Czech Rep < 4.13 3.73 3.54 4.61
PRIBOR=>
Hungary < 6.40 6.06 5.73 6.83
BUBOR=>
Poland < 5.80 5.66 5.38 5.86
WIBOR=>
Note: FRA are for ask prices
quotes
**************************************************
************
(Reporting by Karol Badohal in Warsaw, Anita Komuves in
Budapest and Jason Hovet in Prague; Editing by Kim Coghill)
Zloty pulls back from testing multi-year highs
July 16, 2024 at 11:35 am
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