WARSAW, January 31 (Reuters) – Central European currencies remained mostly stable on Tuesday ahead of a series of interest rate decisions later in the week, including the Federal Reserve and European Central Bank, and locally the Czech central bank.
The Hungarian Forint EURHUF= was up 0.04% at 389.3500 per euro at 0920 GMT, having fallen on Monday after S&P downgraded the country’s debt rating to “BBB-/A-3”, citing still-high inflation .
“The fear of the S&P’s downgrade has not dissipated, but it hasn’t really been able to make its impact felt, as the rapid 18% deposit rate keeps the forint strong,” said a Budapest-based marketer. .
“I think we will stay in the 386-395 range against the euro for the next one or two weeks unless there is a major development. Longer term, I think the forint is more likely to weaken.”
The Czech crown EURCZK= was little changed on the day at 23.8460 per euro ahead of a Czech central bank meeting on Thursday. Analysts expect the bank keep the prime rate stable at 7.00% for a fifth consecutive month.
The Fed will set interest rates on Wednesday, followed by the European Central Bank (ECB) on Thursday.
The Polish zloty EURPLN= was slightly lower at 4.7130 per euro. The market awaits information from the Ministry of Finance on the debt supply for February.
Romanian debt managers are also expected to announce their domestic issuance plans for next month.
On Monday, they mined 2 billion euros ($2.16 billion) worth of Eurobonds, their second outing in overseas markets this year after selling $4 billion worth of bonds at 5, 10 and 30 years old on January 5.
Romania also sold five times more domestic debt than expected in January, with oversubscribed tenders and yields supported by a hike in central bank rates.
The Romanian leu EURRON= weakened Tuesday by 0.17% to 4.9200 per euro.
Central European stock markets were mixed, with Warsaw .WIG20 and Budapest .BUX down 0.2% and 0.3%, respectively, and Bucharest .STILL up 0.3%.
prague .PX was little changed on Tuesday, but is on track for its best month since November 2020, driven mainly by a rise in the CEZ CEZP.PR shares, as the majority public service had its best month since 2005, driven by expectations of a possible restructuring of the group.
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($1 = 0.9241 euros)
(Reporting by Anna Wlodarczak-Semczuk in Warsaw, Luiza Ilie in Bucharest, Jason Hovet in Prague, Gergely Szakacs in Budapest; Editing by Rashmi Aich)
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