KBC research desk takes a summer holiday break so there won't be new report until Tuesday, August 25
Headlines
Currencies: CEE currencies stronger on lower risk aversion
Czech Republic
The Czech koruna was more or less sideways during most of the day and slightly strengthened at the end of Thursday’s session. However, comparing with other central European peers, its gains were only modest as the koruna seems to have lost an appetite for sharper moves ahead of the CNB meeting scheduled for next week.
Lower risk aversion could slightly support the koruna even today as no important domestic events are released. Nevertheless, later on the koruna could be affected by U.S. GDP release.
| Currencies | change | |
| EUR/CZK | 25.56 | 0.00% |
| EUR/HUF | 266.7 | -0.6% |
| EUR/PLN | 4.155 | -0.5% |
| USD/PLN | 2.940 | -1.6% |
| EUR/USD | 1.412 | 0.2% |
| USD/JPY | 95.3 | 0.3% |
| Bonds 2Y | change | |
| Czech Rep. | 2.77 | 0.03 |
| Hungary 3Y | 8.92 | -0.08 |
| Poland | 5.00 | -0.09 |
| Slovakia | 2.39 | -0.08 |
| Eurozone | 1.35 | -0.04 |
| USA | 1.19 | -0.01 |
| Bonds 10Y | Change | |
| Czech Rep. | 5.55 | -0.01 |
| Hungary | 8.90 | 0.08 |
| Poland | 6.17 | -0.08 |
| Slovakia | 5.03 | -0.11 |
| Eurozone | 3.38 | -0.08 |
| USA | 3.62 | -0.08 |
Hungary
The Hungarian forint continued to recover on Thursday and overnight strengthening lifted the currency beyond the 267.00 level. Positive sentiment on global equity markets remained the main driving force behind the price action of the Hungarian currency and increasing popularity of the Polish currency among international investors lent some additional support.
Monetary Council member Mrs Nemenyi gave a dovish comment yesterday and hinted a further, gradual easing of monetary conditions. This was nothing new to the market and therefore the reaction was muted.
Coming weeks will likely repeat this pattern as the pair has been following the general emerging currency market sentiment. Central bank’s next meeting will take place at the end of the month and politics is also quiet during the summer holidays. Thus there does not seem any major domestic news on the agenda that would change the current situation.
Poland
The Polish zloty came back to stronger territory around 4.15 EUR/PLN on Thursday. Stronger equities and lower global risk aversion were the main driving factors as usual. Hawkish comments of Dariuzs Fillar and Marian Noga were hardly surprising as both are well known for their consistent hawkish stance. Nevertheless Fillar said that the majority on the council expects positive GDP growth in the second quarter and in the second half of the year as well.
Today the domestic calendar is empty. The start to the session may be moderately positive, but the focus later during the day should be on US GDP figures. From a technical point of view the picture still looks pretty well and we see the next target for the pair at 4.066 EUR/PLN (50% Fibonacci retracement).
