Forint on rollercoaster, investors eye cenbank steps

Forint on rollercoaster, investors eye cenbank steps

By Anita Komuves

BUDAPEST, Aug 24 (Reuters) - Central European currencies were mixed on Wednesday, with the Hungarian forint on a rollercoaster ride as low summertime trade volumes caused a high level of volatility.

The Hungarian forint EURHUF= added 0.58% on the day and was trading at 410.40 per euro by 0915 GMT after falling to a six-week low of 414.75 earlier in the day.

"This is a (positive) correction, and low liquidity also causes huge swings," an FX trader in Budapest said. "Some investors could also be preparing for next week's central bank meeting, which could help the forint."

The National Bank of Hungary holds its next rate-setting meeting next Tuesday, when it is widely expected to continue its tightening cycle as it fights soaring inflation.

Data showed on Tuesday Hungary's gross wages rose by an annual 15.4% in June, with double-digit wage rises at a time when double-digit inflation emerging as a key policy challenge for central banks, especially in Hungary and Poland.

Some analysts expect the NBH to tighten earlier than next week by raising its one-week deposit rate at a weekly tender on Thursday.

"At tomorrow's central bank tender a rate hike is needed in order to slow, to halt the weakening of the forint," brokerage Equilor wrote in a note.

The currency, Central Europe's worst performer so far this year with its 10% depreciation versus the euro, has been pressured recently by soaring gas prices and a firming dollar, as well as a lack of agreement between Hungary and Brussels on a release of European Union funds.

"When the European Union says something definitive on the funds, be it positive or negative, that will be a game changer for the forint," another currency trader said. "I do not expect significant moves until then."

Prime Minister Viktor Orban's chief of staff said on Tuesday Hungary will amend several laws criticised by the European Commission if an agreement on EU funds is reached with the EU executive.

Elsewhere, the Polish zloty EURPLN= slid 0.2% to 4.7780 versus the common currency as it was pressured by risk aversion in global markets, analysts said.

Stocks in the region were mixed, with Warsaw's equities .WIG20 losing 0.92% while Prague .PX weakened 0.63%. Budapest .BUX was 0.52% higher while Bucharest .BETI added 0.08%.

CEE

SNAPSH AT

MARKETS OT

1115

CET

CURREN

CIES

Latest Previo Daily Change

us

bid

close change in

2022 EURCZK Czech

<EURCZK 24.645 24.656 +0.04 +0.92 =

crown

=>

0

0

%

% EURHUF Hungary <EURHUF 410.40 412.80 +0.58 -9.99% =

forint =>

00

00

% EURPLN Polish <EURPLN 4.7780 4.7685 -0.20% -3.91% =

zloty

=>

EURRON Romania <EURRON 4.8820 4.8825 +0.01 +1.36 =

n leu

=>

%

% EURHRK Croatia <EURHRK 7.5090 7.5115 +0.03 +0.11 =

n kuna =>

%

% EURRSD Serbian <EURRSD 117.31 117.37 +0.05 +0.23 =

dinar

=>

00

00

%

%

Note:

calculated from

1800

daily

CET

change

Latest Previo Daily Change

us

close change in

2022 .PX

Prague

.PX

1194.1 1201.7 -0.63%

5

800

.BUX

Budapes .BUX

43227. 43004. +0.52 -14.77

t

57

14

%

% .WIG20 Warsaw <.WIG20 1641.4 1656.7 -0.92% -27.59

>

8

7

% .BETI Buchare .BETI 12355. 12345. +0.08 -5.41%

st

07

45

% .SBITO Ljublja <.SBITO 1158.2 1158.4 -0.02% -7.74% P

na

P>

6

7

.CRBEX Zagreb <.CRBEX 2006.7 2003.1 +0.18 -3.49%

>

3

3

% .BELEX Belgrad <.BELEX 849.39 849.62 -0.03% +3.49 15

e

15>

% .SOFIX Sofia

<.SOFIX 614.12 613.28 +0.14 -3.39%

>

%

Yield Yield Spread Daily

(bid) change vs

change

Bund

in

Czech

spread

Republi

c

CZ2YT=

<CZ2YT= 5.9160 -0.235 +506b -25bps RR

2-year RR>

0

ps CZ5YT=

<CZ5YT= 4.9190 0.0550 +383b +6bps RR

5-year RR>

ps CZ10YT

<CZ10YT 4.4980 -0.051 +318b -6bps =RR

10-year =RR>

0

ps

Poland

PL2YT=

<PL2YT= 7.1680 0.0110 +631b +0bps RR

2-year RR>

ps PL5YT=

<PL5YT= 6.7140 0.0680 +562b +7bps RR

5-year RR>

ps PL10YT

<PL10YT 6.3880 0.0580 +507b +5bps =RR

10-year =RR>

ps

FORWARD

3x6

6x9

9x12

3M

interb

ank

Czech

<CZKFRA

7.35

7.35

7.11

7.25

Rep

><PRIBO

R=>

Hungary <HUFFRA 14.55 14.70 14.48 12.23

><BUBOR

=>

Poland <PLNFRA

7.48

7.53

7.43

7.05

><WIBOR

=>

Note:

are for ask

FRA

prices

quotes

****************************************

**********************


Additional reporting by Pawel Florkiewicz in Warsaw; Editing by Krishna Chandra Eluri