CEE MARKETS-Zloty slips further as focus shifts to U.S. stimulus

BY Reuters | ECONOMIC | 01/14/21 05:25 AM EST
       By Alan Charlish
    Jan 14 (Reuters) - The Polish zloty continued to
slip on Thursday after the central bank said it may intervene
further to weaken it, while dollar strength after a report about
bigger-than-expected U.S. stimulus provided a risk for central
European currencies.
    President-elect Joe Biden is due to outline his economic
plans later on Thursday, and CNN reported that he could spend $2
trillion in stimulus, well above market expectations. U.S.
treasury yields rose on the news, boosting the dollar.
    "Given the strong negative correlation between CEE
currencies and the euro/dollar, this can be a game-changer, at
least temporarily," said Piotr Poplawski, senior economist at
ING in Warsaw, referring to the Biden press conference.
    At 0956 GMT, the zloty was 0.10% weaker against the euro at
4.5416, after having slipped as much as 0.4% on Wednesday
afternoon after the central bank kept its key interest rate at
0.1% but indicated further interventions in foreign exchange
markets to weaken it are possible.
    Asked about the Polish central bank's interventions in an
interview published on Thursday, National Bank of Hungary
(NBH)Deputy Governor Barnabas Virag told news website
portfolio.hu that it "did not want to participate in any
currency war."
    Virag also said Hungary's central bank should stick to its
cautious monetary policy stance.
    The Hungarian forint was 0.24% stronger against
the euro at 359.70. "...The relative strength of the HUF vs the
PLN, seen since end-December, could remain," Erste said in a
note, referring to Virag's comments.
    The Czech crown softened 0.1% to 26.1840.
    Stocks inched higher amid news of the Biden stimulus plan.
The main indices in Prague, Budapest and Warsaw
 were up 0.1-0.6%
    "At the beginning of the year, generally, not too much is
happening on the stock markets; we have consolidation. There are
expectations about the stimulus from Biden which is supposed to
happen," said DM BOS analyst Konrad Ryczko.

                   CEE      SNAPSHO   AT
                   MARKETS  T        1056
                                     CET

                   CURRENC
                   IES
                            Latest   Previou  Daily    Change
                                     s
                            bid      close    change   in 2021
 EURCZK  Czech     EURHUF  Hungary   0        0
 EURPLN  Polish    EURRON  Romanian  EURHRK  Croatian  EURRSD  Serbian   0        0
         Note:     calculated from            1800
         daily                                CET
         change

                   STOCKS
                            Latest   Previou  Daily    Change
                                     s
                                     close    change   in 2021
 .PX     Prague             1077.89  1076.57   +0.12%   +4.94%
                                          00
 .BUX    Budapest           44961.9  44684.3   +0.62%   +6.78%
                                  8        6
 .WIG20  Warsaw    .BETI   Buchares           10312.8  10272.0   +0.40%   +5.17%
         t                        7        0
 .SBITO  Ljubljan  .CRBEX  Zagreb    .BELEX  Belgrade  .SOFIX  Sofia     BONDS
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
                                                       in
         Czech                                         spread
         Republic
 CZ2YT=    2-year  s
 CZ5YT=    5-year  s
 CZ10YT            s
         Poland
 PL2YT=    2-year  s
 PL5YT=    5-year  s
 PL10YT            s

                   FRA
                            3x6      6x9      9x12     3M
                                                       interba
                                                       nk
         Czech     Hungary   Poland    Note: FRA quotes are for
         ask prices
         ********************************************
         ******************








 (Reporting by Alan Charlish in Warsaw, Anita Komuves in
Budapest and Jason Hovet in Prague; editing by Uttaresh.V)



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