Market News

FX edge higher, forint rally takes breather - REUTERS

DECEMBER 04, 2021

(Reuters) - Central European currencies ticked up on Friday, led by the Czech crown and Polish zloty as the region held on to gains won this week, although a rally in Hungary's forint spurred by more rate hikes sputtered.

Stock markets were a touch higher tracking global peers.

The region's currencies have sought to recover some lost ground after global coronavirus worries and a stronger U.S. dollar knocked them off their firming paths in recent weeks.

A Reuters poll on Friday pointed to gains for the region's major currency pairs next year, lifted by tighter monetary policy amid strong inflation pressures. Continuing dollar strength, though, should drag on the region. read more

The forint was largely steady at 363.80 to the euro by 0956 GMT, having gained as much as 1.9% since Monday's close.

Analysts attributed the stagnation to the dollar, which was up ahead of key U.S. jobs data that could clear the path for an earlier rate hike by the U.S. Federal Reserve. read more

The forint had hit a three-week high on Thursday when the central bank hiked its one-week deposit rate, raising rates for the fifth time in under three weeks to tame rising inflation. read more

"Future development of the one-week depo rate is hard to predict and will strongly depend on the exchange rate movements," Erste Group Bank said. "It cannot be ruled out that a further similar step would arrive next Thursday."

The zloty and crown edged up, with the Czech currency stabilising around a two-week high, up 0.3% at 25.38 to the euro, in what a trader said was quiet trade.

The zloty added 0.2%, trading at 4.59 per euro.

Bank Millennium said a slight zloty correction was possible after a rise of more than 2% this week. "The zloty ... will now wait for new impulses," it said.

Polish inflation data this week showed price growth hit a new two-decade high last month, adding to expectations of further rate hikes and boosting the zloty. read more

Reporting by Jason Hovet in Prague, Anita Komuves in Budapest and Alan Charlish in Warsaw; Editing by Aditya Soni


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