FX stuck near lows with eyes on U.S. vote, rate meetings
By Anita Komuves
BUDAPEST, Nov 5 (Reuters) -Hungary's forint slipped to near a more than 22-month low on Tuesday, leading losses in central Europe as markets limped into a close U.S. presidential election while preparing for interest rate meetings in Poland, the Czech Republic and Romania.
Democratic candidate Kamala Harris and Republican Donald Trump remain virtually tied in U.S. opinion polls and the winner may not be known for days after Tuesday's vote.
Central European currencies have been under pressure in recent weeks from a stronger U.S. dollar against the euro, cutting risk appetite in the region, as markets positioned for a possible Trump victory.
Analysts have generally viewed Trump and his "America First" approach as negative for central Europe's currencies, with some of his policies seen as inflationary and leading to gains for the dollar.
The forint EURHUF=, central Europe's worst performer so far this year, has felt the brunt of weakness in the region caused by election uncertainty as well as a struggling Hungarian economy. The forint slid 0.28% to trade at 409.4 to the euro on Tuesday.
"All eyes are on America now. Until there is a final result, I expect currencies in the region to remain under pressure," an FX trader in Budapest said.
"When things calm down, there can be a correction, but I do not expect a huge strengthening, especially in the forint."
Elsewhere, the crown EURCZK= edged down 0.04% to 25.336 versus the common currency, staying at weakened levels before the Czech National Bank meets on Thursday, with wide expectations of another interest rate cut coming.
The Polish zloty EURPLN= was 0.11% weaker, after a rally in the previous session, when a weakening of the dollar had helped it recoup its losses from the end of last week.
"This week, and especially today and tomorrow, volatility in the markets will be generated by the U.S. election and later the (U.S. Federal Reserve rate) decision," Santander Bank Polska wrote in a note.
Before the Fed decision, the National Bank of Poland's monetary policy council is seen keeping rates on hold, as it has done for the past year after a few initial cuts.
Romania's central bank rounds out the week on Friday and some analysts also see it keeping rates on hold.
CEE MARKETS | SNAPSHOT | AT 1028 CET | ||||
CURRENCIES | ||||||
Latest | Previous | Daily | Change | |||
trade | close | change | in 2024 | |||
EURCZK= | Czech crown | EURCZK= | 25.3360 | 25.3250 | -0.04% | -2.50% |
EURHUF= | Hungary forint | EURHUF= | 409.4000 | 408.2500 | -0.28% | -6.40% |
EURPLN= | Polish zloty | EURPLN= | 4.3600 | 4.3550 | -0.11% | -0.36% |
EURRON= | Romanian leu | EURRON= | 4.9750 | 4.9751 | +0.00% | -0.01% |
EURRSD= | Serbian dinar | EURRSD= | 116.9000 | 117.0600 | +0.14% | +0.30% |
Note: daily change | calculated from | 1800 CET | ||||
Latest | Previous | Daily | Change | |||
close | change | in 2024 | ||||
.PX | Prague | .PX | 1661.12 | 1653.6200 | +0.45% | +17.48% |
.BUX | Budapest | .BUX | 74420.55 | 73837.78 | +0.79% | +22.77% |
.WIG20 | Warsaw | .WIG20 | 2246.44 | 2252.86 | -0.28% | -4.12% |
.BETI | Bucharest | .BETI | 17280.73 | 17209.02 | +0.42% | +12.42% |
Spread | Daily | |||||
vs Bund | change in | |||||
Czech Republic | spread | |||||
CZ2YT=RR | 2-year | CZ2YT=RR | 3.4300 | 0.0100 | +112bps | -1bps |
CZ5YT=RR | 5-year | CZ5YT=RR | 3.7100 | -0.0130 | +144bps | -3bps |
CZ10YT=RR | 10-year | CZ10YT=RR | 4.0730 | 0.0130 | +166bps | -1bps |
Poland | ||||||
PL2YT=RR | 2-year | PL2YT=RR | 4.9800 | -0.0110 | +267bps | -3bps |
PL5YT=RR | 5-year | PL5YT=RR | 5.3720 | -0.0290 | +310bps | -5bps |
PL10YT=RR | 10-year | PL10YT=RR | 5.7010 | -0.0740 | +329bps | -9bps |
FORWARD RATE AGREEMENTS | ||||||
3x6 | 6x9 | 9x12 | 3M interbank | |||
Czech Rep | CZKFRAPRIBOR= | 3.84 | 3.61 | 3.48 | 4.06 | |
Hungary | HUFFRABUBOR= | 7.03 | 6.92 | 6.82 | 6.50 | |
Poland | PLNFRAWIBOR= | 5.70 | 5.30 | 4.95 | 5.82 | |
Note: FRA quotes | are for ask prices | |||||
Additional reporting by Karol Badohal in Warsaw and Jason Hovet in Prague; Editing by Alex Richardson
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