Search
Central European Weekly
0
0
Slow real wage growth curbs demand pressures
Tue, Sep 2 2008, 08:07 GMT
by KBC Market Research Desk
Czech Republic
Slow real wage growth curbs demand pressures
Hungary
PM proposes tax changes that have minor effect on the tax burden
Poland
Inflation which is still expected to top out in August keeps rate hike expectations alive…
Slovakia
GDP growth should be confirmed at strong 7.6% y/y in Q2
The Week Ahead
GDP detail figures and foreign trade data should grab some attention
Overview
Weak dollar no longer means strong central Europe
Until recently, the weak dollar and sell of on the stock markets had meant guaranteed success for Central Europe. It was the fall of the dollar that helped the Czech koruna and the Polish zloty hit new highs in early July. At that moment, Central Europe attracted large amounts of foreign capital. As investors massively sold the dollar, there was a surplus of foreign capital in markets, with Poland and the Czech Republic having gained reputation of safe harbours, which were fairly independent of the ongoing U.S. crisis and could absorb superfluous liquidity when times were unfavourable.
However, the situation is slowly starting to change. Although the fluctuations of the euro-dollar are still some of the greatest short-term stimuli for the koruna and the zloty, the reactions are starting to be asymmetric. When the dollar appreciates, the koruna and the zloty depreciate, but they fail to strengthen when the dollar is hit by sales. In our opinion, this happens as foreign investors are starting to doubt the role of Central Europe as a safe harbour. The main reasons for their doubts are significantly worse figures from the Eurozone and the fear that poor foreign demand may also have a negative impact on exports from Central European economies. Last week, the extremely poor Ifo index of German business sentiment, a lower growth forecast by the International Monetary Fund and a warning voiced by Fitch also fuelled the general concern.
Published on Tue, Sep 2 2008, 08:10 GMT
Archive
- NBH lowers its base rate from 11.50 % to 11.0 %
Published On Mon, Dec 1 2008, 11:47 GMT - Czech inflation beats a quick retreat
Published On Mon, Nov 24 2008, 11:38 GMT - The NBS Cuts Base Rate by 50 bps to 3.25%
Published On Mon, Nov 17 2008, 12:46 GMT - The National Bank of Slovakia will need to react to the ECB 50bps rate cut
Published On Mon, Nov 10 2008, 12:21 GMT - The koruna fights back
Published On Mon, Nov 3 2008, 12:52 GMT
KBC Bank
| Havenlaan 12, 1080 Brussels
http://www.kbc.be/dealingroom | piet.lammens@kbc.be
Legal disclaimer and risk disclosure
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.Interested in forex trading? forex brokerage firms!
FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)
[Read Premium full description]
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2008 "FXstreet.com. The Forex Market" All Rights Reserved.