CEE MARKETS-Crown, forint lead FX rebound as cooler dollar gives relief

Reuters
·3 min read

PRAGUE, March 9 (Reuters) - The Czech crown firmed around 0.7% on Tuesday to recover from a three-month low and lead central Europe higher as currencies corrected following several days of weakening. Stocks were also mostly on the rebound with global markets taking some relief from a drop in U.S. bond yields. The U.S. dollar's weakening from multi-month highs gave a boost to currencies. The crown was the biggest gainer while Hungary's forint had risen 0.4% to 366.43 to the euro by 1003 GMT, moving away from a four-month low hit in the previous session. It was helped also by headline inflation data rising as expected, although markets see interest rate stability ahead. "February inflation data is in line with expectations, and the euro-dollar rate seems to have bottomed out, which helps the forint," a Budapest-based trader said. Central European currencies have been under pressure in the past month as the region seeks to contain or slow the spread of COVID-19 infections and lockdown measures stay in place longer. The Czech Republic has been particularly hard hit. Dollar strength has added to the pressure. The crown, after firming earlier in the year on market bets of interest rate hikes later in 2021, has lost as much as 3% since mid-February. It recovered to 26.245 to the euro on Tuesday after hitting a low of 26.44 on Monday. "We maybe got a bit too far already (in the move to weaker levels)," one dealer said. Elsewhere, the Polish zloty rose 0.3% to 4.584 per euro as part of the correction. Warsaw stocks led equity gains, with the blue-chip index gaining over 1%. CEE SNAPSHO AT MARKETS T 1103 CET CURRENC IES Latest Previou Daily Change s bid close change in 2021 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2021 .PX Prague 1062.05 1065.05 -0.28% +3.40% 00 .BUX Budapest 43543.0 43540.3 +0.01% +3.41% 3 6 .WIG20 Warsaw <.WIG20 1987.20 1965.25 +1.12% +0.16% > .BETI Buchares 10535.0 10566.4 -0.30% +7.44% t 6 0 .SBITO Ljubljan <.SBITO 991.34 990.23 +0.11% +10.04 P a P> % .CRBEX Zagreb <.CRBEX 1845.83 1846.65 -0.04% +6.13% > .BELEX Belgrade <.BELEX 747.78 748.58 -0.11% -0.11% 15 15> .SOFIX Sofia <.SOFIX 490.48 494.08 -0.73% +9.60% > BONDS 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 FRA 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest, and Alan Charlish in Warsaw, Editing by William Maclean)

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