By Krisztina Than
BUDAPEST, Oct 30 (Reuters) - The forint eased more than
half a percent versus the euro on Wednesday, underperforming
central European currencies, after much weaker-than-expected GDP
data showed the Hungarian economy dipped into technical
recession in the third quarter.
Hungary's economy is still recovering from an inflation
shock which drove price growth to more than 25% in the first
quarter of 2023, eating into Hungarians' spending power. Close
trade links with Germany are also hitting the economies of
Hungary, the Czech Republic and Slovakia, where German carmakers
have big car plants.
Despite the weak growth outlook, Hungary's central bank kept
interest rates on hold earlier this month as the weakening
forint cut its room for manoeuvre in policy. Its base rate is
still the highest in the European Union at 6.5%.
"Today's growth print is incrementally dovish for
Hungarian rate prospects, although we expect the NBH to remain
on hold in the very near term as the Forint has continued to
weaken against the Euro," Goldman Sachs analysts said in a note.
The Hungarian GDP data showed a contraction of 0.8%
year-on-year in the third quarter, defying expectations for
growth. GDP contracted by 0.7% from the previous quarter.
The forint, which has been the region's laggard
with a 6% fall so far this year, weakened 0.55% to hit a new
22-month low of 407.50 per euro by 0952 GMT.
"The next potential resistance could be around 408.50,"
brokerage Equilor said in a note.
Other currencies in the region were mostly steady with
investors on the sidelines as uncertainty about the U.S.
presidential election and a firmer dollar remained in focus.
The dollar has been supported by expectations that former
president Donald Trump could win in Nov. 5 elections. His tax
and tariff policies are seen as inflationary and more likely to
keep U.S. rates high.
The zloty was broadly flat at 4.336 per euro. The
Czech crown traded a shade weaker at 25.372.
CEE SNAPSHOT AT
MARKETS 1152
CET
CURRENCI
ES
Latest Previo Daily Change
us
trade close change in 2024
EURCZK= Czech 0
EURHUF= Hungary 00
EURPLN= Polish EURRON= Romania EURRSD= Serbian 00
Note: calculat 1800
daily ed from CET
change
Latest Previo Daily Change
us
close change in 2024
.PX Prague 1637.84 1643.3 -0.33% +15.83%
400
.BUX Budapes 74055.15 74225. -0.23% +22.16%
t 68
.WIG20 Warsaw 2266.06 2284.7 -0.82% -3.28%
6
.BETI Buchare 17508.18 17504. +0.02% +13.90%
st 24
Spread Daily
vs Bund change in
Czech spread
Republi
c
CZ2YT=R 0 s
CZ5YT=R 0 s
CZ10YT= 0 s
Poland
PL2YT=R 0 s
PL5YT=R 0 s
PL10YT= 0 s
FORWARD
RATE
AGREEMEN
TS
3x6 6x9 9x12 3M
interbank
Czech 3.82 3.55 3.40 4.08
Rep Hungary 6.46 6.27 6.14 6.45
Poland 5.71 5.28 4.88 5.85
Note: are for
FRA ask
quotes prices
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(Editing by Christina Fincher and Sharon Singleton)
Line of Credit 
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