Latest News

Zloty seen leading gains as rate hikes support central European currencies – Reuters poll

Economy19 minutes ago (Nov 03, 2021 08:17)

© Reuters. FILE PHOTO: Polish currency zloty coins are seen in this photo illustration taken in Warsaw, Poland, September 29, 2012. REUTERS/Peter Andrews

By Miroslava Krufova and Anita Komuves

PRAGUE/BUDAPEST (Reuters) – The Polish zloty and Hungarian forint will notch up strong gains against the euro over the next year as most central European currencies return to a path of appreciation, helped by expected rate hikes, a Reuters poll showed on Wednesday.

As inflation hits new highs in central Europe, more policy tightening is expected to lift regional currencies that had shed around 1% in the last month due to a stronger dollar.

“Generally over the next 12 months the zloty should be supported by a tightening of domestic monetary policy,” said Krystian Jaworski, senior economist at Credit Agricole (PA:CAGR) in Warsaw.

“Also the growth prospects should be quite good after this wave of the pandemic finishes.”

The zloty was expected to firm 3.5% from Monday’s closing levels over the next year, to 4.46 versus the euro.

Inflation data on Friday further fuelled Polish rate hike expectations as the CPI soared to an annual rate of 6.8%, and officials and analysts have said it could hit 8%.

The zloty has lagged its regional peers in 2021, with the Polish central bank the last in the region to begin lifting rates, taking a cautious approach until a surprise October hike. It is expected to tighten further at a meeting on Wednesday.

The Hungarian forint is seen firming 3% to 350 per euro in the next year, also supported by rate hikes that the National Bank of Hungary started in June.

“Even though the bank slowed the pace of its rate hikes to 15 basis points, the tightening cycle must have an effect on the forint sooner or later. The small steps add up,” Gergely Suppan, an analyst at Takarekbank, said.

Meanwhile, the Czech crown, the region’s best performer this year, is seen firming 2.3% over the next 12 months as markets price in 125 basis points in hikes for the rest of the year.

In Romania, where political uncertainty continues to cloud attempts to rein in twin deficits, the leu is projected to ease 1.0% in the next year to 4.997 versus the euro.

Zloty seen leading gains as rate hikes support central European currencies – Reuters poll

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

BHP in talks with Wyloo over Noront takeover, extends tender expiry

Previous article

Sterling holds around three-week lows ahead of central bank meetings

Next article

You may also like


Leave a reply

Your email address will not be published.

More in Latest News