PRAGUE, Sept 20 (Reuters) - Central Europe's currencies
steadied against the euro on Friday, with the Hungarian forint
and Czech crown holding near recent levels ahead of central bank
policy meetings next week that may deliver further interest rate
cuts.
After mostly shrugging off the U.S. Federal Reserve's
decision to start its easing cycle with a larger than usual
interest rate cut this week, focus was turned to central
European policymakers.
Markets were pricing in chances of Hungarian and Czech
rate-cutting cycles at meetings on Tuesday and Wednesday,
respectively.
The forint was steady at 394.10 to the euro at
1022 GMT, sitting in the middle of recent trading ranges.
"We now expect the NBH to ease at both its September and
October meetings, as opposed to only in October previously, on
the back of more favourable global financial conditions," Morgan
Stanley said in a note.
Expected rate cuts by major central banks could create space
to ease monetary conditions further in emerging markets, the
National Bank of Hungary (NBH) said in the minutes of its August
27 policy meeting released last week.
The bank had left its base rate steady at the European
Union's highest level of 6.75% last month after 15 consecutive
cuts worth a combined 1,125 basis points.
The Czech National Bank has also slowed it rate-cutting pace
in an easing drive started last December. Markets see chances of
another 25-basis-point cut, to bring the main rate to 4.25%, its
lowest level since the end of 2021.
The crown was also steady at 25.096 per euro.
Czech bond yields were also little moved by the first
estimates of the cost of the massive flooding in central Europe
in the past week. The Czech Finance Ministry said on Thursday it
would provide 30 billion crowns ($1.34 billion) to tackle flood
damage under an amendment of its 2024 budget.
"We see relatively low impact to spreads," Sergey Dergachev,
a portfolio manager at Union Investment, said.
"What we are monitoring is ... what will be the impact of
those heavy floods on the political situation in those countries
affected. We will have elections in Romania."
"And what will happen next week in Austria. Even though
Austria is not (an emerging market), it's outcome is also very
crucial for central Europe."
In Poland, the zloty eased 0.1% to 4.2775 per euro
while Romania's leu was unchanged at 4.9745 to the
euro.
CEE SNAPSHOT AT
MARKETS 1222
CET
CURRENCIES
Latest Previo Daily Change
us
trade close change in 2024
Czech 0
Hungary 00
Polish Romania Serbian 00
Note: calcula 1800 CET
daily ted
change from
Latest Previo Daily Change
us
close change in 2024
Prague 1584.10 1584.0 +0.01% +12.03
100 %
Budapes 72817.10 73084. -0.37% +20.12
t 05 %
Warsaw 0
Buchare 17649.71 17629. +0.12% +14.82
st 06 %
Spread Daily
vs Bund change
in
Czech spread
Republi
c
0
Poland
FORWARD RATE
AGREEMENTS
3x6 6x9 9x12 3M
interba
nk
Czech Hungary Poland Note: are for
FRA ask
quotes prices
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(Reporting by Jason Hovet in Prague, Karin Strohecker in
London, Krisztina Than in Budapest and Karol Badohal in Warsaw;
Editing by Louise Heavens)
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