Hungarian forint hovers at 2-week low amid EU fund concerns

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PRAGUE — The forint on Thursday hovered near its lowest

level in more than two weeks, as the unit remained weak following reports the

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European Commission would recommend suspending billions of euros earmarked for

Hungary.

After a drop of more than half a percent in the previous session, the forint

clawed back some losses to trade down 0.15% at 406.1 to the euro, as

of 0938 GMT.

Two officials told Reuters the European Commission was expected to recommend

on Sunday the suspension of up to 70% of 22.5 billion euros worth of cohesion

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funds earmarked for Hungary from the EU’s 2021-27 budget.

Hungary has long been locked in rule of law disputes with the EU, risking it

funds, which has weighed on the forint, so far the central Europe’s

worst-performing currency this year.

Stock indexes in the region were mixed, with Prague climbing 1.5% to

lead the gains, while Budapest fell 0.5%.

The Czech crown and Romania’s leu both eased.

In Poland, the zloty was flat after final inflation data confirmed

a preliminary reading showing year-on-price growth topped 16% last month.

With strong interest rate hikes around central Europe in the past year, the

data comes as Poland’s central bank governor Adam Glapinski said last week rates

could be held in October or raised slightly amid concerns high borrowing costs

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could weigh too much on the economy.

Traders were turned to U.S. retail and industrial production data due out

later in the day, with the dollar near recent peaks amid expectations the U.S.

Federal Reserve will continue to tighten policy aggressively as it tries to curb

inflation.

“A potential source of volatility may turn out to be the US data, which may

affect the Polish currency through the Eurodollar channel,” Bank Millennium

said.

CEE MARKETS SNAPSHOT AT

1138 CET

CURRENCI

ES

Latest Previous Daily Change

bid close change in 2022

EURCZK Czech 24.5200 24.5050 -0.06% +1.44%

= crown

EURHUF Hungary 406.1000 405.5000 -0.15% -9.04%

= forint

EURPLN Polish 4.7180 4.7175 -0.01% -2.69%

= zloty

EURRON Romanian 4.9275 4.9251 -0.05% +0.42%

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= leu

EURHRK Croatian 7.5215 7.5194 -0.03% -0.05%

= kuna

EURRSD Serbian 117.3000 117.3200 +0.02% +0.24%

= dinar

Note: calculated from 1800

daily CET

change

Latest Previous Daily Change

close change in 2022

.PX Prague 1252.72 1234.160 +1.50% #VALUE!

0

.BUX Budapest 40962.39 41178.24 -0.52% -19.24%

.WIG20 Warsaw 1530.67 1528.29 +0.16% -32.48%

.BETI Buchares 11854.93 11836.38 +0.16% -9.24%

t

.SBITO Ljubljan 1086.60 1077.98 +0.80% -13.45%

P a

.CRBEX Zagreb 1990.06 1983.17 +0.35% -4.29%

.BELEX Belgrade 834.79 842.58 -0.92% +1.71%

15

.SOFIX Sofia 607.67 611.62 -0.65% -4.41%

Yield Yield Spread Daily

(bid) change vs Bund change

in

Czech spread

Republic

CZ2YT= 2-year 5.9980 -0.0250 +455bp -7bps

RR s

CZ5YT= 5-year 4.9930 0.1640 +339bp +12bps

RR s

CZ10YT 4.6880 0.1370 +296bp +10bps

=RR 10-year s

Poland

PL2YT= 2-year 6.5480 0.0260 +510bp -2bps

RR s

PL5YT= 5-year 6.5110 0.1120 +491bp +7bps

RR s

PL10YT 6.0230 0.0550 +430bp +2bps

=RR 10-year s

FORWARD

3×6 6×9 9×12 3M

interba

nk

Czech

Hungary

Poland

Note: are for ask prices

FRA

quotes

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(Reporting by Jason Hovet in Prague; Editing by Sherry Jacob-Phillips)