WARSAW, Feb 20 (Reuters) - Central Eastern European currencies held largely steady on Friday, as investors eyed developments around Iran as well as U.S. economic data releases.
Most emerging market currencies and stocks were on track to end the week little changed on Friday, as escalating geopolitical tensions instilled caution in investors while they await a crucial inflation reading in the U.S.
U.S. President Donald Trump warned Iran on Thursday it must make a deal over its nuclear program or "really bad things" will happen, and set a deadline of 10 to 15 days. Tehran threatened to retaliate against U.S. bases in the region if attacked.
"On Friday, the domestic macroeconomic calendar is empty, so the zloty will remain more influenced by impulses from global markets," analysts at Polish lender PKO BP said, pointing to U.S. gross domestic product and inflation data.
"At the same time, we expect the EUR/PLN exchange rate to remain below 4.23 unless the risk of an armed conflict between the U.S. and Iran materializes," they added.
The Polish zloty EURPLN= was little changed at 1018 GMT, trading at 4.2240 per euro, slipping on Thursday to its lowest level since early February on the back of worse-than-expected January industrial output data caused by cold winter weather.
In Hungary, the forint traded a tad lower against the euro, at 379.20, with focus on next week's interest rate decision.
Hungary's central bank is likely to restart rate cuts next week, according to a Reuters poll published on Friday, with a 25-basis-point cut in its base rate to 6.25% and further easing likely to follow ahead of an April parliamentary election.
"Given weaker inflation pressures and subdued growth, we expect the NBH to take the first 25bp step in what we believe will be a cautious easing cycle, with particular focus on FX stability," Morgan Stanley analysts wrote in a note.
Further on, they flagged risks related to potential fiscal policy changes and currency volatility, following the outcome of Hungary's general elections on April 12.
Elsewhere, the Czech crown EURCZK= was also broadly stable at 24.2340 per euro.
According to comments from Czech central bank Vice-Governor Eva Zamrazilova published on Friday, the bank could have room for another 25 basis-point interest-rate easing if prices in services and real estate slow down.
CEE MARKETS SNAPSHOT AT 1118 CET | |||||
CURRENCIES | Latest trade | Previous close | Daily change | Change in 2025 | |
Czech crown | EURCZK= | 24.2340 | 24.2420 | +0.03% | -0.28% |
Hungary forint | EURHUF= | 379.2000 | 379.1500 | -0.01% | +1.36% |
Polish zloty | EURPLN= | 4.2240 | 4.2245 | +0.01% | -0.20% |
Romanian leu | EURRON= | 5.0980 | 5.0960 | -0.04% | -0.08% |
Serbian dinar | EURRSD= | 117.2900 | 117.4200 | +0.11% | +0.01% |
Note: daily change calculated from 1800 CET | |||||
STOCKS | Latest | Previous close | Daily change | Change in 2025 | |
Prague | .PX | 2716.81 | 2692.5500 | +0.90% | +1.16% |
Budapest | .BUX | 126206.77 | 126673.84 | -0.37% | +13.67% |
Warsaw | .WIG20 | 3379.55 | 3385.33 | -0.17% | +6.14% |
Bucharest | .BETI | 29207.93 | 28979.86 | +0.79% | +19.51% |
BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
Czech Rep 2-year | CZ2YT=RR | 3.4440 | 0.0420 | +139bps | +4bps |
Czech Rep 5-year | CZ5YT=RR | 3.8010 | 0.0050 | +147bps | +1bps |
Czech Rep 10-year | CZ10YT=RR | 4.4100 | 0.0130 | +167bps | +2bps |
Poland 2-year | PL2YT=RR | 3.4390 | -0.1400 | +138bps | -14bps |
Poland 5-year | PL5YT=RR | 4.2500 | -0.0420 | +191bps | -3bps |
Poland 10-year | PL10YT=RR | 4.9710 | -0.0050 | +223bps | +0bps |
FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
Czech Rep | CZKFRA, PRIBOR= | 3.39 | 3.31 | 3.28 | 3.48 |
Poland | PLNFRA, WIBOR= | 3.55 | 3.40 | 3.35 | 3.85 |
Note: FRA quotes are for ask prices | |||||
(Reporting by Karol Badohal in Warsaw and Gergely Szakacs in Budapest; Editing by Ronojoy Mazumdar)
((karl.badohal@thomsonreuters.com;))
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