Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

CEE FX to resist second wave fears, focus on economic recovery: Reuters poll

Economic IndicatorsAug 06, 2020 03:40AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. New 100 and 200 euro banknotes are displayed in Vienna

By Alan Charlish and Miroslava Krufova

WARSAW/PRAGUE (Reuters) - Most central European currencies will firm over the next 12 months, a Reuters poll showed, buoyed by improved risk sentiment as investors shrug off worries about a rise in coronavirus cases and focus on hopes of economic recovery.

The reopening of economies has helped central European currencies recover ground after they took a hammering in the early stages of the pandemic and a recent spike in infections has not significantly dampened investors' optimism.

"The baseline scenario for the global economy, which expects recovery of global economic activity ... will be positive to risk sentiment in financial markets, which should be supportive also for CEE currencies," said Radomir Jac, chief economist at Generali (MI:GASI) Investments CEE in Prague.

Expected to be the region's best performing currency, the Czech crown (EURCZK=) is seen firming 1.7% to 25.725 against the euro from Tuesday's European close.

"The Czech currency is supported by the relatively still very solid fundamentals of the Czech economy ... the interest rate differential also remains favourable and the Czech central bank does not seem to plan further easing of monetary conditions," Jac said.

Since March, the Czech central bank has slashed its main interest rate three times, by a total of 200 basis points, to 0.25%, but governor Jiri Rusnok has said a further cut could threaten financial stability while other rate setters have also pointed to stable rates ahead.

The Polish zloty (EURPLN=) is seen strengthening 1.1% to 4.35 over the next 12 months, while the Hungarian forint (EURHUF=) is expected to firm 0.9% to 343.

Marcin Sulewski, an economist at Santander (MC:SAN) Bank Polska, said he did not expect rising coronavirus cases to spook the market, despite daily infection rates in Poland hitting record highs over the past week.

"The key assumption here is that nobody, or very few people, expect that such strict laws like during the first wave could be reintroduced now," he said.

Some market participants had speculated the Polish central bank could intervene to weaken the zloty after it said in June the economic recovery could be "mitigated by the lack of visible zloty exchange rate adjustment to the global pandemic shock".

"The risk of FX intervention has declined in our view in recent weeks," said Sulewski, pointing to an interview with news agency PAP by rate-setter Jerzy Zyzynski, who said the comments were only informative and not intended as a form of intervention.

Romania's turbulent political scene and twin budget and current account deficits will weigh on the leu (EURRON=) over the coming year, the poll showed. It is expected to fall almost 1.0% against the euro to 4.88.

"A series of elections scheduled later this year and the subsequent fiscal outlook imply risks for the leu and for the sovereign rating," said Jakub Kratky a financial analyst at Generali Investments CEE.

CEE FX to resist second wave fears, focus on economic recovery: Reuters poll
 

Related Articles

Bitcoin falls 7% to $35,431.15
Bitcoin falls 7% to $35,431.15 By Reuters - Jun 18, 2021

(Reuters) - Bitcoin dropped 7% to $35,431.15 at 20:02 GMT on Friday, losing $2,666.53 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is down...

Fed-fueled dollar rises as bears make for exits
Fed-fueled dollar rises as bears make for exits By Reuters - Jun 18, 2021 7

By Saqib Iqbal Ahmed and Julien Ponthus NEW YORK (Reuters) - The dollar extended its advance against a basket of currencies on Friday, building on the gains logged after the U.S....

Trust Dollar Rally for Now, But Bears Will Be Back
Trust Dollar Rally for Now, But Bears Will Be Back By Investing.com - Jun 18, 2021 2

By Yasin Ebrahim Investing.com – The dollar's sunny days are set to continue for quite a while, but the Fed's path will eventually turn murky again to bring the bears out of...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
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.
Continue with Google
or
Sign up with Email