Views Article – Sharenet Wealth

Europe, Forex

Zloty slips further as focus shifts to U.S. stimulus

By Alan Charlish Jan 14 (Reuters) – The Polish zloty continued to slip on Thursday after the central bank said it may intervene further to weaken it, while dollar strength after a report about bigger-than-expected U.S. stimulus provided a risk for central European currencies. President-elect Joe Biden is due to outline his economic plans later on Thursday, and CNN reported that he could spend $2 trillion in stimulus, well above market expectations. U.S. treasury yields rose on the news, boosting the dollar. “Given the strong negative correlation between CEE currencies and the euro/dollar, this can be a game-changer, at least temporarily,” said Piotr Poplawski, senior economist at ING in Warsaw, referring to the Biden press conference. At 0956 GMT, the zloty was 0.10% weaker against the euro at 4.5416, after having slipped as much as 0.4% on Wednesday afternoon after the central bank kept its key interest rate at 0.1% but indicated further interventions in foreign exchange markets to weaken it are possible. Asked about the Polish central bank’s interventions in an interview published on Thursday, National Bank of Hungary (NBH)Deputy Governor Barnabas Virag told news website that it “did not want to participate in any currency war.” Virag also said Hungary’s central bank should stick to its cautious monetary policy stance. The Hungarian forint was 0.24% stronger against the euro at 359.70. “…The relative strength of the HUF vs the PLN, seen since end-December, could remain,” Erste said in a note, referring to Virag’s comments. The Czech crown softened 0.1% to 26.1840. Stocks inched higher amid news of the Biden stimulus plan. The main indices in Prague, Budapest and Warsaw were up 0.1-0.6% “At the beginning of the year, generally, not too much is happening on the stock markets; we have consolidation. There are expectations about the stimulus from Biden which is supposed to happen,” said DM BOS analyst Konrad Ryczko. CEE SNAPSHO AT MARKETS T 1056 CET CURRENC IES Latest Previou Daily Change s bid close change in 2021 EURCZK Czech <EURCZK 26.1840 26.1590 -0.10% +0.17% = crown => EURHUF Hungary <EURHUF 359.700 360.580 +0.24% +0.84% = forint => 0 0 EURPLN Polish <EURPLN 4.5416 4.5370 -0.10% +0.39% = zloty => EURRON Romanian <EURRON 4.8735 4.8722 -0.03% -0.17% = leu => EURHRK Croatian <EURHRK 7.5800 7.5813 +0.02% -0.43% = kuna => EURRSD Serbian <EURRSD 117.500 117.600 +0.09% +0.06% = dinar => 0 0 Note: calculated from 1800 daily CET change STOCKS Latest Previou Daily Change s close change in 2021 .PX Prague 1077.89 1076.57 +0.12% +4.94% 00 .BUX Budapest 44961.9 44684.3 +0.62% +6.78% 8 6 .WIG20 Warsaw <.WIG20 2031.21 2023.36 +0.39% +2.38% > .BETI Buchares 10312.8 10272.0 +0.40% +5.17% t 7 0 .SBITO Ljubljan <.SBITO 953.45 950.12 +0.35% +5.84% P a P> .CRBEX Zagreb <.CRBEX 1820.50 1823.06 -0.14% +4.67% > .BELEX Belgrade <.BELEX 737.05 748.64 -1.55% -1.54% 15 15> .SOFIX Sofia <.SOFIX 455.03 454.77 +0.06% +1.68% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.2540 -0.0320 +096bp -3bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.7880 -0.0240 +150bp -2bps RR RR> s CZ10YT <CZ10YT 1.2870 -0.0070 +182bp +0bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.0320 -0.0560 +074bp -5bps RR RR> s PL5YT= 5-year <PL5YT= 0.3670 -0.0470 +108bp -5bps RR RR> s PL10YT <PL10YT 1.2060 -0.0040 +174bp +0bps =RR 10-year =RR> s FRA 3×6 6×9 9×12 3M interba nk Czech <CZKFRA 0.37 0.40 0.48 0.36 Rep ><PRIBO R=> Hungary <HUFFRA 0.76 0.78 0.81 0.75 ><BUBOR => Poland <PLNFRA 0.16 0.16 0.17 0.21 ><WIBOR => Note: FRA quotes are for ask prices ******************************************** ****************** (Reporting by Alan Charlish in Warsaw, Anita Komuves in Budapest and Jason Hovet in Prague; editing by Uttaresh.V)

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