Central European currencies hovered near multi-week lows on Friday due to fears that an anti-EU candidate may win the first round of France's presidential election on Sunday. Opinion polls put centrist Emmanuel Macron in pole position, but a shooting of a French policeman in Paris on Thursday might strengthen far-right candidate Marine Le Pen, who urged France on Friday to reinstate border checks.
"Markets could worry if Le Pen or (radical left candidate Jean-Luc) Melenchon wins (the first round)," Erste analysts said in a note. The zloty hit a one-month low against the euro and traded at 4.27 at 0845 GMT. "After yesterday's terrorist attack and days before a presidential election, market attention is focused on France," Warsaw-based Millennium bank said in a note.
It said the possibility of the far-right candidate's victory, as well as Thursday's attack in Paris, had a negative impact on risk sentiment and "weighed on emerging markets currencies." The leu eased to 4.544, a touch off a 17-day low which it touched in early trade, just days after it set a 2-month high, amid worries over a bill on continuing public sector wage increases, which will be submitted to parliament on Monday.
Earlier wage hikes and tax cuts were already feared to boost the budget deficit. The Czech crown rebounded to firm side of its former cap of 27 against the euro. On Thursday it pierced the 27 line for the first time since the central bank removed the cap two weeks ago.
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