Views Article – Sharenet Wealth

Europe, Forex

FX slips after industrial output data disappoints

PRAGUE, July 7 (Reuters) – Central Europe’s currencies returned some recent gains on Tuesday, with the Czech crown touching a one-week low after disappointing industrial data from the region and as investors remain wary of rising coronavirus cases. Hungary’s industrial output dropped by 30.7% in May, worse than expected after a 36.8% plunge in April. In the Czech Republic, industrial production in May dropped 25.7% year-on-year, also more than forecast. “We expected a negative result, but somewhat below 30%,” said David Nemeth, senior analyst at KH Bank in Budapest, in a note. “The restart seems slower than expected,” he added. Weighing on sentiment was a new European Commission forecast predicting the euro zone economy will drop deeper into recession this year and rebound less steeply in 2021 than previously thought. The Hungarian forint had dropped 0.4% on the day to 353.95 to the euro to lead losses in the region and the Czech crown dipped 0.1% to 26.71 per euro by 1000 GMT. As of Monday’s close, the forint had gained 1.4% since hitting a two-month low on June 30 and the crown had risen almost 1% since touching a four-week low on June 29. The data came as a disappointment as analysts had expected better data in May as Europe eases lockdowns to limit the spread of the new coronavirus. However, market watchers expect an improvement in the coming months. “We expect industrial output to come in at -10.5% in 2020 (in the Czech Republic),” Erste Group said. “In the coming months production should be gradually recovering, due to increased both domestic and foreign demand.” Elsewhere, Poland’s zloty slipped 0.2% to 4.47 per euro and the Romanian leu was steady at 4.8395. In stock markets, Prague stocks were mostly lower although a rise in dual-listed Erste Group Bank held the index up. Budapest fell 1.4%. CEE SNAPSHO AT MARKETS T 1200 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 26.7100 26.6800 -0.11% -4.78% = crown => EURHUF Hungary <EURHUF 353.950 352.415 -0.43% -6.44% = forint => 0 0 EURPLN Polish <EURPLN 4.4702 4.4627 -0.17% -4.78% = zloty => EURRON Romanian <EURRON 4.8395 4.8397 +0.00% -1.06% = leu => EURHRK Croatian <EURHRK 7.5490 7.5580 +0.12% -1.37% = kuna => EURRSD Serbian <EURRSD 117.570 117.580 +0.01% +0.00% = dinar => 0 0 Note: calculated from 1800 daily CET change STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 941.40 938.000 +0.36% -15.62% 0 .BUX Budapest 35992.3 36489.4 -1.36% -21.90% 6 2 .WIG20 Warsaw <.WIG20 1805.04 1818.55 -0.74% -16.05% > .BETI Buchares 8569.19 8595.51 -0.31% -14.11% t .SBITO Ljubljan <.SBITO 851.65 853.60 -0.23% -8.02% P a P> .CRBEX Zagreb <.CRBEX 1617.10 1621.33 -0.26% -19.84% > .BELEX Belgrade <.BELEX 661.39 660.75 +0.10% -17.50% 15 15> .SOFIX Sofia <.SOFIX 446.55 447.12 -0.13% -21.40% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.0510 0.0460 +073bp +5bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.3180 -0.1160 +099bp -12bps RR RR> s CZ10YT <CZ10YT 0.8010 0.0260 +123bp +3bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.1220 -0.0150 +080bp -2bps RR RR> s PL5YT= 5-year <PL5YT= 0.7450 -0.0030 +142bp -1bps RR RR> s PL10YT <PL10YT 1.3600 -0.0100 +179bp -1bps =RR 10-year =RR> s FRA 3×6 6×9 9×12 3M interba nk Czech <CZKFRA 0.29 0.29 0.29 0.34 Rep ><PRIBO R=> Hungary <HUFFRA 0.63 0.62 0.59 0.70 ><BUBOR => Poland <PLNFRA 0.20 0.22 0.22 0.26 ><WIBOR => Note: FRA quotes are for ask prices ******************************************** ****************** (Reporting by Jason Hovet in Prague and Anita Komuves in Budapest; Editing by Amy Caren Daniel)


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