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Forint hovers at 18-month low, zloty traders eye Polish rate outlook



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>CEE MARKETS-Forint hovers at 18-month low, zloty traders eye Polish rate outlook</title></head><body>

Interest rate cuts have weighed on the forint

Polish zloty best performer in region this year

Traders await Polish central bank's rate guidance

Central bank kept base rate unchanged on Wednesday

By Anita Komuves

BUDAPEST, Oct 3 (Reuters) -Central Europe's currencies steadied on Thursday after falling the previous day, with the Hungarian forint clinging around the psychological 400 per euro level that it weakened past in the previous session for the first time since March 2023.

By 0900 GMT, the forint EURHUF= had edged up 0.05% on the day and traded at 400.1 versus the euro, the region's main reference currency.

Central Europe's currencies weakened on Wednesday with the forint plunging to its lowest against the euro in 18 months as the conflict in the Middle East made investors risk-averse and boosted the safe-haven dollar. Prior to that, interest rate cuts in Hungary had added to forint pressures.

"The forint has been so close to 400 lately that it was just a question of time when it breaks it," an FX trader in Budapest said. "But this means that the central bank will probably not have room for a rate cut next month."

The National Bank of Hungary cut its base rate by 25 basis points to 6.5% on Sept. 24 and said that in the next three months the bank would decide on rates on a monthly basis, weighing the options of no change in rates or a small cut.

Elsewhere, the Czech crown EURCZK= was down 0.12%, trading at 25.348 per euro as it was stuck around two-month lows.

Falling interest rates in the Czech Republic have also been a drag on the crown, although analysts forecast the currency to be the lone gainer in central Europe in the coming year, according to a Reuters poll published on Thursday.

In Poland, the central bank has paused rate cuts for the past year, boosting the zloty, which has been the best performer in the region this year with a 1% gain.

The zloty EURPLN= eased 0.1% in mid-morning trade and was trading at 4.299 per euro, coming a day after Polish rate setters again left their base rate unchanged, as expected, with inflation inching upward.

Investors were looking toward a speech by Polish central bank Governor Adam Glapinski later in the day to gauge clues on the bank's future rate path.

"Having changed his guidance only last month, we do not expect a material further shift at this month’s press conference," Goldman Sachs wrote in a note.



CEE MARKETS

SNAPSHOT

AT 1100 CET






CURRENCIES







Latest

Previous

Daily

Change




trade

close

change

in 2024

EURCZK=

Czech crown

EURCZK=

25.3480

25.3110

-0.15%

-2.55%

EURHUF=

Hungary forint

EURHUF=

400.1000

400.3000

+0.05%

-4.23%

EURPLN=

Polish zloty

EURPLN=

4.2990

4.2945

-0.10%

+1.06%

EURRON=

Romanian leu

EURRON=

4.9763

4.9765

+0.00%

-0.04%

EURRSD=

Serbian dinar

EURRSD=

116.9600

117.0600

+0.09%

+0.24%


Note: daily change

calculated from


1800 CET












Latest

Previous

Daily

Change





close

change

in 2024

.PX

Prague

.PX

1589.64

1596.6500

-0.44%

+12.42%

.BUX

Budapest

.BUX

72637.33

73059.71

-0.58%

+19.82%

.WIG20

Warsaw

.WIG20

2291.21

2317.70

-1.14%

-2.21%

.BETI

Bucharest

.BETI

17436.14

17443.67

-0.04%

+13.43%













Spread

Daily






vs Bund

change in


Czech Republic





spread

CZ2YT=RR

2-year

CZ2YT=RR

3.2080

0.0060

+115bps

-1bps

CZ5YT=RR

5-year

CZ5YT=RR

3.4390

0.1090

+148bps

+8bps

CZ10YT=RR

10-year

CZ10YT=RR

3.7670

0.0270

+163bps

+0bps


Poland






PL2YT=RR

2-year

PL2YT=RR

4.7970

0.0130

+274bps

+0bps

PL5YT=RR

5-year

PL5YT=RR

5.0410

0.0450

+308bps

+2bps

PL10YT=RR

10-year

PL10YT=RR

5.3720

0.0110

+324bps

-2bps










FORWARD RATE AGREEMENTS







3x6

6x9

9x12

3M interbank


Czech Rep

CZKFRAPRIBOR=

3.68

3.30

3.05

4.18


Hungary

HUFFRABUBOR=

6.08

5.80

5.37

6.30


Poland

PLNFRAWIBOR=

5.78

5.47

4.88

5.86


Note: FRA quotes

are for ask prices





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







Additonal reporting by Jason Hovet in Prague and Pawel Florkiewicz in Warsaw; Editing by Emelia Sithole-Matarise

For related news and prices, click on the codes in brackets: All emerging market news EMRG CEEU CEE/ Spot FX rates Eastern Europe spot FX EEFX= Middle East spot FX MEFX= Asia spot FX ASIAFX= Latin America spot FX LATAMFX= Other news and reports World central bank news CEN Economic Data Guide ECONGUIDE Official rates GLOBAL/INT Emerging Diary EMRG/DIARY Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY
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