CEE MARKETS-Battle with EU over LGBT rights, funds weighs on forint, zloty
By Anita Komuves BUDAPEST, July 16 (Reuters) - The Hungarian forint and the Polish zloty weakened on Friday, extending their losses, as Hungary's debate with the European Union that could hold up recovery funds for Budapest weighed on both currencies. The European Commission launched legal action against Hungary over measures it said discriminated against LGBT people and also opened a case against Poland over self-declared "LGBT-ideology free zones". The forint weakened 0.27% on the day to trade at 359.38 per euro, hitting a two-month low. "The conflict with Brussels is definitely a factor among all the other forces that work against the forint now," an FX trader in Budapest said. The currency lost about 1% of its value this week as CEE currencies were also pressured by a global risk-off mood, fuelled by the spread of the Delta variant of the coronavirus and higher-than-expected inflationary pressures in the United States. The zloty weakened 0.16% on the day to trade at 4.584 to the euro. The threat that the EU could hold up recovery funds for Hungary "hit most currencies in the region, including the zloty," Adam Antoniak, economist at Pekao bank said. "Investors fear that a similar decision may also be made in the case of Poland." The currency weakened more than 0.8% this week, as continued dovish messages from the Polish central bank coupled with intensifying inflation and a firming U.S. dollar also put the zloty under pressure. Unlike its Czech and Hungarian counterparts, the National Bank of Poland kept rates unchanged at record lows last week, arguing that the acceleration in inflation is temporary. The Czech crown edged up 0.05% to 25.52 per euro, buoyed by further rate hike expectations as data released on Tuesday showed that June inflation eased less than expected. Equities in the region gained, with Budapest up 0.65% and Warsaw edging 0.1% higher. Prague's stocks were up 0.45%, extending gains after hitting a 10-year high in the previous session, as shares in dual-listed cybersecurity group Avast , soared on news the company was in talks over a merger with peer NortonLifeLock. CEE SNAPSHOT AT 1045 CET MARKETS CURRENCIES Latest Previous Daily Change bid close change in 2021 EURCZK= Czech <EURCZK= 25.5200 25.5320 +0.05% +2.78% crown > EURHUF= Hungary <EURHUF= 359.3800 358.4000 -0.27% +0.93% forint > EURPLN= Polish <EURPLN= 4.5840 4.5765 -0.16% -0.54% zloty > EURRON= Romanian <EURRON= 4.9285 4.9290 +0.01% -1.29% leu > EURHRK= Croatian <EURHRK= 7.4970 7.4900 -0.09% +0.67% kuna > EURRSD= Serbian <EURRSD= 117.4900 117.5600 +0.06% +0.07% dinar > Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2021 .PX Prague 1202.49 1197.1600 +0.45% +17.07 % .BUX Budapest 47990.05 47677.82 +0.65% +13.97 % .WIG20 Warsaw 2262.74 2260.49 +0.10% +14.05 % .BETI Buchares 12043.56 12025.00 +0.15% +22.82 t % .SBITOP Ljubljan <.SBITOP 1161.87 1154.92 +0.60% +28.97 a > % .CRBEX Zagreb 1936.61 1937.76 -0.06% +11.34 % .BELEX1 Belgrade <.BELEX1 769.02 769.02 +0.00% +2.73% 5 5> .SOFIX Sofia 564.04 564.18 -0.02% +26.03 % Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT=R 2-year <CZ2YT=R 1.3610 -0.0220 +204bps -2bps R R> CZ5YT=R 5-year <CZ5YT=R 1.6590 -0.0430 +228bps -4bps R R> CZ10YT= <CZ10YT= 1.8130 0.0050 +215bps +1bps RR 10-year RR> Poland PL2YT=R 2-year <PL2YT=R 0.4270 0.0010 +111bps +1bps R R> PL5YT=R 5-year <PL5YT=R 1.1810 -0.0360 +180bps -3bps R R> PL10YT= <PL10YT= 1.6520 -0.0330 +199bps -3bps RR 10-year RR> FORWARD 3x6 6x9 9x12 3M interba nk Czech 1.18 1.56 1.80 0.68 Rep <PRIBOR= > Hungary 1.69 2.03 2.22 1.07 Poland 0.31 0.43 0.61 0.21 Note: are for ask prices FRA quotes ****************************************************** ******** (Additional reporting by Alicja Ptak in Warsaw and Jason Hovet in Prague, Editing by Sherry Jacob-Phillips)
