Czech crown retreats past 24/euro, forint stays hot

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PRAGUE — The Czech crown retreated

beyond the psychological 24 per euro level on Thursday, pulling

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back from a 12-year high, while Hungary’s forint continued to

test four-month peaks as central European currencies stayed

positive to start the new year.

Stock markets also rose on Thursday, adding to 2%-4% gains

posted so far in the first week of 2023.

In international bond markets, Hungary issued a total of

$4.25 billion worth of dollar-denominated benchmark bonds,

Finance Minister Mihaly Varga said on Thursday.

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In Poland, the zloty waited on central bank Governor Adam

Glapinski’s news conference after the monetary policy council

left interest rates unchanged on Wednesday, with expectations of

inflation soon slowing.

Markets have had a hot start to begin 2023 as easing gas

prices and China’s emergence from its strict “zero-COVID” rules

boost investor sentiment.

The crown on Wednesday breached 24 to the euro for

the first time since early 2011, but it pulled back on Thursday,

with some dealers thinking there is shrinking space for gains

with a looming recession.

It traded at 24.008, down 0.1% on the day, at 0946 GMT.

“Economic factors – current account development, an economy

likely in a mild recession, an expected drop in interest rates

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already this year – should not be acting in this direction for

the crown,” Erste Group Bank said, adding early-year positioning

in the past also led to gains that could not be held.

The Hungarian forint traded at 395.25 to the euro,

up 0.2% and gaining already 1% in 2023, after falling the most

in central Europe in 2022.

Poland’s zloty fell 0.2% to 4.674 per euro.

Polish central bank arguments for stable interest rates were

bolstered by preliminary inflation data from December on

Thursday showing a headline rate of 16.6%, below a forecast of

17.3%.

But analysts said more attention was being paid to U.S.

monetary policy after Federal Reserve minutes.

“The global market is partially influenced by the

description from the last Fed meeting, which reiterated that

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U.S. central bankers do not expect interest rate cuts in 2023,”

Bank Millennium said.

CEE SNAPSHO AT

MARKETS T 1046

CET

CURRENC

IES

Latest Previou Daily Change

s

bid close change in 2023

EURCZK Czech

EURHUF Hungary 0 0

EURPLN Polish

EURRON Romanian

EURHRK Croatian

EURRSD Serbian 0 0

Note: calcula 1800

daily ted CET

change from

Latest Previou Daily Change

s

close change in 2023

.PX Prague 1235.79 1230.06 +0.47% +2.83%

00

.BUX Budapest 45168.8 44937.0 +0.52% +3.14%

8 1

.WIG20 Warsaw <.wig20>

.BETI Buchares 12145.4 12065.0 +0.67% +4.13%

t 0 4

.SBITO Ljubljan <.sbito p a>

.BELEX Belgrade <.belex>

.SOFIX Sofia <.sofix>

Yield Yield Spread Daily

(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT= 2-year s

CZ5YT= 5-year s

CZ10YT s

Poland

PL2YT= 2-year s

PL5YT= 5-year s

PL10YT s

FORWARD

3×6 6×9 9×12 3M

interba

nk

Czech

Hungary

Poland

Note: are for

FRA ask

quotes prices

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(Reporting by Jason Hovet in Prague, Krisztina Than in

Budapest, and Pawel Florkiewicz in Warsaw; Editing by Shounak

Dasgupta)