BUDAPEST, May 26 (Reuters) - Hungary's forint eased on
Tuesday ahead of a meeting of the National Bank of Hungary later
in the day where analysts expect the base rate to be kept on
hold amid a rise in energy prices and inflation risks.
The forint eased 0.3% to trade at 356.90 versus
the euro, giving up some gains from the previous session.
A Reuters poll of analysts sees the base rate remaining
unchanged at 6.25% as the war in the Middle East outweighs the
impact of recent gains in the forint.
The central bank delivered its first 25-basis-point cut
since late 2024 in February, but has remained cautious since
then.
The central bank will announce its decision at 1200 GMT, and
publish a statement and hold a press conference at 1300 GMT.
"After the cut in the interest rate on the FX swap facility,
I see some chance of a rate cut and if that happens, the forint
would ease a bit, but the rate would soon return to current
levels," an FX trader in Budapest said.
"The market is still bullish when it comes to Hungary and
the forint, the effect of the election still holds," the trader
said.
Prime Minister Peter Magyar said that he will travel to
Brussels on Thursday where he expects a deal on the release of
suspended European Union funds. A possible deal announced on
Thursday could further support the forint, the trader said.
Elsewhere, currencies took cues from Iran war developments.
The Polish zloty edged down 0.1% to trade at 4.234 to
the euro.
"After yesterday's strengthening of the z?oty, driven by
improved sentiment and hopes for an upcoming US-Iran agreement,
today's session brings a decline in optimism," ING wrote in a
note.
Expectations for an imminent end to the Middle East conflict
waned on Tuesday after the U.S. launched fresh attacks on Iran,
driving concerns over the global economic outlook and raising
oil prices.
The Czech crown was little changed, while the
Romanian leu added 0.2% to trade at 5.2326 to the
euro.
CEE MARKETS SNAPSHOT AT 1019
CET
CURRENCIES Lates Previo Daily Change
t us chang in
trade close e 2025
Czech 00 0 %
Hungar 000 00 % %
forint
Polish 0 %
Romani 5 7%
Serbia 000 00 9% %
dinar
Note: daily change calculated from 1800
CET
STOCKS Lates Previo Daily Change
t us chang in
close e 2025
Budape 13589 135935 -0.03 +22.4
st 9.33 .10 % 0%
Warsaw 57 7 3% 9%
Buchar .51 69 3% 8%
BONDS Yield Yield Sprea Daily
(bid) change d vs change
Bund in
spread
Czech 0 0 bps
5-year
Czech 0 0 bps
10-yea
r
Poland 0 0 bps
Poland 0 0 bps
r
FORWARD RATE 3x6 6x9 9x12 3M
AGREEMENTS interb
ank
Czech Poland Note: FRA quotes are for ask
prices
(Reporting by Anita Komuves in Budapest and Pawel Florkiewicz
in Warsaw; Editing by Ronojoy Mazumdar)
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