BUDAPEST, May 16 (Reuters) - The Polish zloty
firmed on Monday ahead of Tuesday's gross domestic product (GDP)
figures, which are expected to show robust growth in the first
quarter amid growing headwinds for Central European economies.
At 0845 GMT, the zloty was 0.5% stronger at 4.6725 against
the euro, outperforming the Hungarian forint and the
Czech crown, which gained 0.3% and 0.2%, respectively.
Poland, the region's biggest economy, is expected to report
8% first-quarter economic growth on Tuesday, accelerating from
7.3%, while analysts project Hungary's growth easing to 6.9%
from 7.1% in the previous three months.
The Hungarian central bank's deputy governor last week,
however, said that first-quarter growth could in fact exceed 8%
in Hungary as well, signalling a strong momentum before an
expected slowdown later this year.
"Reports from the domestic economy pointing to the continued
good economic conditions will be a potential factor supporting
the zloty, but it is the moods in the global markets that will
be their main determinant," Bank Millennium said in a note.
"These, in turn, are determined, on the one hand, by
expectations for further monetary policy tightening in the U.S.,
and, on the other hand, by growing concerns about a slowdown in
the economy."
U.S. rate hikes and a stronger dollar are hitting investor
appetite in the region. Last week, U.S. Federal Reserve Chair
Jerome Powell repeated his expectation of half-percentage-point
rate rises at the next two policy meetings.
After sharp interest rate hikes around central Europe since
last year, fears of an end to tightening, like in the Czech
Republic, or a slowing pace, such as in Hungary, have started
pressuring currencies, prompting the Czech central bank to
intervene last week.
The Czech and Hungarian central banks, which last June
became the first in the European Union to launch big rate hikes
to fight inflation, surprised investors last week by looking
ready to step on the brakes, wary of stifling economic growth.
Analysts said the comments came as a surprise as inflation
is still surging in both countries.
"In connection with the war in Ukraine, there is a threat of
outages in imports of some agricultural commodities and there
have been also disruptions in deliveries of some key components
in industry, namely for the carmakers, which can strengthen
price pressures further," Generali Investments CEE Chief
Economist Radomir Jac said.
Even with Monday's gains, the zloty and the forint remain in
the red for the year despite massive monetary tightening by
their central banks, with the forint posting a 4% loss so far,
the worst in Central Europe.
CEE SNAPSHO AT
MARKETS T 1045
CET
CURRENC
IES
Latest Previou Daily Change
s
bid close change in 2022
EURCZK Czech EURHUF Hungary 0 0
EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change
s
close change in 2022
.PX Prague 1299.25 1296.91 +0.18% #VALUE!
00
.BUX Budapest 41502.6 41255.7 +0.60% -18.17%
5 0
.WIG20 Warsaw .BETI Buchares 12217.6 12133.1 +0.70% -6.46%
t 8 6
.SBITO Ljubljan .CRBEX Zagreb .BELEX Belgrade .SOFIX Sofia 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
FORWARD
3x6 6x9 9x12 3M
interba
nk
Czech Hungary Poland Note: are for ask
FRA prices
quotes
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(Reporting by Gergely Szakacs; Editing by Rashmi Aich)
Line of Credit 
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