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Currencies: Forint is pleased with another huge foreign trade surplus
Czech Republic
The Czech koruna gave away part of its recent gains yesterday. The negative sentiment could be explained by higher risk aversion, which caused some losses in other regional markets.
Today, the koruna has started the session with a quick check of the June CPI and unemployment figures. Both figures were actually a bit lower than the market had expected. While the year-on-year CPI dropped to 1.2% Y/Y, the unemployment rate rose to 8.0%. Both figures do not alter our view that the CNB will cut the repo at its August interest-rate-setting meeting. Concerning the koruna, its reaction to the released figures should be calm, so we expect the EUR/CZK will develop a sideways trading pattern around the 26.0 figure.
| Currencies | Close | change |
| EUR/CZK | 25.98 | -0.20% |
| EUR/HUF | 276.9 | -0.40% |
| EUR/PLN | 4.391 | -0.50% |
| USD/PLN | 3.16 | -0.70% |
| EUR/USD | 1.394 | 0.20% |
| USD/JPY | 93.3 | -1.00% |
Poland
Yesterday, the Polish zloty stayed on a weaker footing and failed to get back below 4.40 EUR/PLN for most of the session. The zloty didn’t care about the comments made by the finance ministry saying that the pair seems to be stabilising and that there is no need for use of EU funds for market interventions. Solid demand in the ten year auction did not bring benefits for the zloty either.
For the rest of the week the calendar of domestic events is empty. We believe that the zloty could calm down a bit as the US earnings season took a positive start so far. Hence the pair may move in a tight range below 4.40 EUR/PLN:
| Bonds 2Y | Close | change |
| Czech Rep | 2.85 | -0.01 |
| Hungary 3Y | 9.58 | 0.02 |
| Poland | 5.35 | -0.08 |
| Slovakia | 2.61 | 0.01 |
| Eurozone | 1.19 | -0.02 |
| USA | 0.94 | -0.01 |
| Bonds 10Y | Close | change |
| Czech Rep | 5.81 | -0.03 |
| Hungary | 9.51 | 0 |
| Poland | 6.23 | -0.08 |
| Slovakia | 5.16 | 0 |
| Eurozone | 3.27 | -0.01 |
| USA | 3.34 | -0.1 |
Hungary
The Hungarian forint tested the 280.00 level overnight, but good foreign trade data from May helped it to recover to above 277.00 this morning. Yesterday’s trading was generally quiet and the market seems to have been following the worldwide sentiment. The country has accumulated €1.5bn trade surplus so far this year and this should help in lowering the large external debt.
