Zloty firms ahead of central bank meeting, stocks gain on global cues
- World stocks hit fresh peaks on Tuesday on growing bets that the US Federal Reserve will keep its expansive policy for the near-term
BUDAPEST: The Polish zloty led gains among central European currencies on Tuesday, while most equities in the region firmed on strong global cues, with Hungarian shares touching a record high.
World stocks hit fresh peaks on Tuesday on growing bets that the US Federal Reserve will keep its expansive policy for the near-term.
Budapest's stocks added 0.29% while Prague was 0.31% higher. Bucharest gained 0.24%, while Warsaw bucked the trend and weakened 0.85%.
The Polish zloty recouped some losses from the previous session and firmed 0.11% to 4.5210 per euro, a day before the central bank's rate meeting where a Reuters poll of analysts suggests the main rate will stay unchanged.
"The zloty remains under pressure from yesterday's mild comments of the governor of the National Bank of Poland," Bank Millennium wrote in a note.
The governor of Poland's central bank, Adam Glapinski, said on Monday that hiking rates poses a risk after inflation in emerging Europe's largest economy hit a two-decade high in August.
Glapinski has stressed that hiking rates too soon could jeopardise economic recovery from the pandemic.
The zloty has been under pressure as Polish policymakers have kept rates record lows, unlike their Hungarian and Czech counterparts who tightened their policies in June to fight rising inflation. The Hungarian forint edged up 0.04% and was trading at 347.5 per euro.
"The currency tried to firm past the 347 level several times recently, and unsuccessfully. I think it will not be able to permanently do so until the next rate meeting," an FX trader in Budapest said.
The National Bank of Hungary holds its next rate meeting on Sept. 21.
Hungary's industrial output grew by an annual 8% in July based on preliminary unadjusted data, below forecasts, as the car sector shrank due to production halts and single-shift production, the Central Statistics Office said on Tuesday.
The Romanian leu edged up 0.02% to 4.9475 per euro, still trading near record lows a day after a junior partner quit Romania's three-party coalition, paving the way for a no-confidence vote against Liberal Prime Minister Florin Citu.
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