Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

CEE currencies to firm on growth, interest rate outlook - Reuters poll

03/07/2018 | 03:03am EDT
Czech Crown coins and notes are seen in this picture illustration

BUDAPEST (Reuters) - Central Europe's main currencies are expected to strengthen in the next 12 months on the back of healthy economic growth and expectations for monetary tightening, a Reuters poll of analysts showed in Wednesday.

According to the March 2-6 poll, the Czech crown will gain 2.3 percent against the euro in the next 12 months relative to Monday's close, to 24.85, which would be its strongest level since 2012.

Its strengthening is fuelled by expectations that the Czech central bank will continue to increase interest rates to fight inflation, analysts said.

The forint is expected to firm 2.2 percent to 307.5 by the end of February next year, and the zloty 1.2 percent to 4.14.

In past weeks, the Polish and the Hungarian units traded near their weakest levels this year as global markets were gripped by risk aversion due to inflation fears, before a rebound this week.

Unlike its Czech peer, the Polish central bank has not been worried over inflation.

It is expected to keep interest rates on hold at its meeting on Wednesday, and its updated economic forecasts are seen confirming that robust growth is coupled with moderate inflation.

"The... meeting should thus have little impact on the zloty," Erste analysts said in a note, adding though that "the recent acceleration of wage growth should turn into demand pressure sooner or later, pushing the inflation rate up slightly in mid-2018".

The bank is expected to start to lift rates next year.

The Hungarian central bank (NBH) could keep its main rate on hold for years, but may start to withdraw the surplus liquidity it has injected into markets through its swap facilities already later this year, said David Nemeth, analyst at K&H Bank.

Nemeth said the risk was a decline in Hungary's big trade surplus, which buoys the forint, as wages and household consumption surge across the region, adding though that a strong inflow of European Union funds this year help the forint.

Peter Virovacz of ING, who sees the forint approaching 300 versus the euro by February next year, said Hungary's current account could surprise on the positive side as new production capacities step in later this year in the key automotive sector.

"The ECB could start to tighten policy next year, so the NBH is unlikely to ease its own policy further," he said, adding that a forint firming would not bother the bank as long as Hungary's government bond spreads over core markets do not rise.

(Polling by Sandor Peto; Editing by Angus MacSwan)

By Sandor Peto


© Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
EURO / CZECH KORUNA (EUR/CZK) 0.01% 25.634 Delayed Quote.-2.02%
EURO / HUNGARIAN FORINT (EUR/HUF) 0.76% 360.22 Delayed Quote.-0.79%
ING GROEP N.V. 0.78% 10.534 Real-time Quote.36.79%
STEP CO.,LTD. 2.98% 1760 End-of-day quote.10.21%
Latest news "Economy & Forex"
11:28aOil slips but set to end week steady on tight supply
RE
11:28aBRADY : A Trader's Perspective on Short-Term Power Trading
PU
11:26aBHP reaches conditional port services deal for Canada potash mine
RE
11:23aDisney Cruise Line to resume sailing from U.S. ports next month
RE
11:23aGM issues new recall for nearly 69,000 Bolt EVs for fire risks
RE
11:20aSchlumberger's profit beats forecast as margins soar on revenue gains
RE
11:03aIndia refiners' June crude processing bridled by virus curbs
RE
10:59aKPMG's banking audits not up to scratch, says UK watchdog
RE
10:54aKimberly-Clark Keeps Forecast of Favorable FX in 2021 -- Currency Comment
DJ
10:51aFROM 'CONGRATULATIONS' TO 'FULLY CANCELED' : California cafe owners hit roadblock
RE
Latest news "Economy & Forex"