Headlines
Currencies: Polish central bank comments support interest rate stability
Poland
The Polish zloty went through another session of moderate weakness. The zloty didn’t receive support from the no change verdict of the NBP followed by rather hawkish comment. The Council’s view is that already implemented cuts should support the return of the economy to the potential path. Beside that, there was a lot of attention devoted to the question of inflation. Overall we are happy to see that the comments are in line with our base line scenario of interest rate stability till the end of 2010. Nevertheless the pair was weaker during the session and approached important 4.21 EUR/PLN level.
We believe in certain stabilisation and moderate strength of the zloty at the end of the week, which should reflect the stabilization on the global equity markets.
| Currencies | change | |
| EUR/CZK | 25.56 | 0.00% |
| EUR/HUF | 268.2 | -0.80% |
| EUR/PLN | 4.174 | -0.60% |
| USD/PLN | 2.987 | 0.70% |
| EUR/USD | 1.409 | -0.50% |
| USD/JPY | 95 | 1.00% |
| Bonds 2Y | change | |
| Czech Rep. | 2.74 | 0.01 |
| Hungary 3Y | 9 | 0.2 |
| Poland | 5.09 | 0.04 |
| Slovakia | 2.47 | -0.12 |
| Eurozone | 1.39 | 0.04 |
| USA | 1.19 | 0.09 |
| Bonds 10Y | Change | |
| Czech Rep. | 5.56 | 0.03 |
| Hungary | 8.82 | 0.23 |
| Poland | 6.25 | 0 |
| Slovakia | 5.14 | -0.04 |
| Eurozone | 3.46 | 0.05 |
| USA | 3.7 | 0.06 |
Czech Republic
The Czech koruna eased a bit as it basically tracked other regionally currencies yesterday. Hence, the EUR/CZK pair closed a bit higher just below the 25.60 level. The market lacked any domestic impulses as we still have been waiting for more comments from the Czech rate setter, which could give us better guidance ahead of the upcoming CNB meeting.
Today is the last day when Board members will be allowed to speak ahead the meeting next Thursday. So far, there have been only three comments (one a bit hawkish, one neutral and one a bit dovish) from the Bank Board, thus we would not be surprised if some of the remaining Board members (Tuma, Tomsik, Rezabek or Holman) decide to talk on rates today.
Hungary
The Hungarian forint was on the rollercoaster on Wednesday. Fears after Asian equity markets dropped in the morning lead to further weakness in EUR/HUF and the pair tested the 271.00 level twice. Later however the market calmed down and the currency recovered to around 269.00.
Regarding the eco data, the final figure of May trade surplus confirmed the preliminary result of close to €0.5bn balance, which the country can use to repay external debt in the coming years. The domestic calendar is light for the coming days, so the market could continue to follow global sentiment.
