Central European assets retreated on Friday as good US job growth data knocked down the euro, but optimism may get the upper hand again when the region's states will report third-quarter economic output figures. The Czech crown, however, did not fall further after a record drop on Thursday when the central bank massively sold the currency in its first intervention in over a decade.
The forint fell 0.2 percent against the euro to 296.97 by 1501 GMT. Hungarian government bond yields edged up, with 3-year bonds trading at 4.28 percent, up 13 basis points from late Thursday's levels. Earlier Hungarian assets were helped by data showing 5.5 percent annual rise in industrial output in September, more than analysts' 3.2 percent forecast.
"(The rise) shows that the economy, orders are slowly starting to grow," said Peter Hodina, corporate relations director of K&H, one of Hungary's biggest bank. But the forint and Poland's zloty retreated after an unexpected pick-up in US job growth in October knocked down the euro and triggered concern that the US Federal Reserve may cut back its bond buying earlier than expected. Its monetary stimulus has fuelled flows into assets in emerging markets.
The zloty shed 0.3 percent against the euro. One Budapest-based currency dealer said the forint and the zloty eased in tandem, but their reaction to the US data was much milder than falls by other emerging market currencies, the Turkish lira and the South African rand. The crown fell almost 5 percent after the intervention to 27 against the euro. It was bid flat at 296.97 on Friday. The Prague bourse led a fall of the region's national equity indices, shedding 1.9 percent, led by Komercni banka. Elsewhere, Romania's leu shed 0.2 percent and the Serbian dinar eased 0.1 percent.