Weaker dollar ahead of US Fed decision props up CEE FX
WARSAW, Sept 16 (Reuters) -The forint continued to firm on Monday as a weaker dollar ahead of the U.S. rates decision boosted emerging market assets including Central Eastern European currencies.
Markets are increasingly expecting an oversized 50-basis-point rate cut by the Federal Reserve later this week, putting pressure on the dollar and boosting investors' risk appetite for riskier assets.
By 1002 GMT, the Hungarian forint EURHUF= was up 0.1% against the euro to 394.20, firming for a fourth session straight to erase losses from early last week.
"I think what is really important here is the dollar weakening ahead of the FOMC decision this Wednesday," Peter Virovacz, senior economist at ING in Budapest, said.
"A bigger and bigger share of market players are expecting a 50 basis point rate cut by the Fed and...this is possibly spilling into the weaker dollar and generally improving outlook for the whole CEE region from an FX perspective."
He called the forint's move against the euro "the usual zigzagging between 393-398", adding that the Fed's decision could have implications for the Hungarian National Bank, which holds a policy decision meeting next week.
In Poland, the zloty EURPLN= also firmed 0.1% to 4.2740 per euro, returning to levels from early last week.
"It is possible that the zloty will weaken this week. The FOMC meeting will be the key event. In the case of a small rate cut by 25bps...the dollar could strengthen with a negative impact on CEE currencies," Santander Bank Polska wrote in a note.
The Czech crown EURCZK= traded 0.1% higher at 25.1350 per euro, hovering near its lowest levels since late August.
CEE MARKETS | SNAPSHOT | AT 1202 CET | |||
CURRENCIES | |||||
Latest | Previous | Daily | Change | ||
trade | close | change | in 2024 | ||
Czech crown | EURCZK= | 25.1350 | 25.1540 | +0.08% | #VALUE! |
Hungary forint | EURHUF= | 394.2000 | 394.6300 | +0.11% | #VALUE! |
Polish zloty | EURPLN= | 4.2740 | 4.2791 | +0.12% | #VALUE! |
Romanian leu | EURRON= | 4.9740 | 4.9739 | -0.00% | #VALUE! |
Serbian dinar | EURRSD= | 116.9500 | 117.0500 | +0.09% | #VALUE! |
Note: daily change | calculated from | 1800 CET | |||
Latest | Previous | Daily | Change | ||
close | change | in 2024 | |||
Prague | .PX | 1575.19 | The unexpected error occurs during parsing the formula. | #VALUE! | #VALUE! |
Budapest | .BUX | 72910.66 | 72075.48 | +1.16% | #VALUE! |
Warsaw | .WIG20 | 2303.93 | 2330.89 | -1.16% | #VALUE! |
Bucharest | .BETI | 17497.86 | 17477.86 | +0.11% | #VALUE! |
Spread | Daily | ||||
vs Bund | change in | ||||
Czech Republic | spread | ||||
2-year | CZ2YT=RR | 3.2390 | -0.1370 | +101bps | -16bps |
5-year | CZ5YT=RR | 3.4260 | 0.0270 | +139bps | +1bps |
10-year | CZ10YT=RR | 3.6850 | -0.0620 | +153bps | -7bps |
Poland | |||||
2-year | PL2YT=RR | 4.6170 | -0.0220 | +239bps | -4bps |
5-year | PL5YT=RR | 4.9810 | -0.0070 | +295bps | -2bps |
10-year | PL10YT=RR | 5.2730 | -0.0140 | +312bps | -2bps |
FORWARD | |||||
3x6 | 6x9 | 9x12 | 3M interbank | ||
Czech Rep | CZKFRAPRIBOR= | 3.83 | 3.44 | 3.11 | 4.32 |
Hungary | HUFFRABUBOR= | 6.10 | 5.61 | 5.07 | 6.47 |
Poland | PLNFRAWIBOR= | 5.73 | 5.27 | 4.68 | 5.85 |
Note: FRA quotes | are for ask prices | ||||
************************************************************** |
Reporting by Karol Badohal in Warsaw; Editing by Shreya Biswas
For related news and prices, click on the codes in brackets:
All emerging market news EMRG CEEU CEE/
Spot FX rates
Eastern Europe spot FX EEFX= Middle East spot FX MEFX=
Asia spot FX ASIAFX= Latin America spot FX LATAMFX=
Other news and reports
World central bank news CEN Economic Data Guide ECONGUIDE
Official rates GLOBAL/INT Emerging Diary EMRG/DIARY
Top events M/DIARY Diaries DIARY Diaries Index IND/DIARY
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.