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CEE MARKETS-FX up, mirrors euro gains; zloty shrugs off…

By Radu-Sorin Marinas BUCHAREST, Aug 4 – The Polish zloty and the Czech crown led Central European currency gains on Tuesday, mirroring the euro’s firming against the dollar, while shrugging off a spike in new coronavirus infections in the region’s biggest economy. The euro, which strengthened 5% at the dollar’s expense last month, inched up 0.2% on the day, with analysts predicting a faster economic recovery of the euro zone compared with that of the United States. The euro zone is Central Europe’s main trading partner. “Equities in the U.S. yesterday ended up in green, so that set up the mood for today, and the euro/dollar going higher also helps. With euro/dollar going higher the zloty has really strengthened,” a Warsaw-based currency trader said. Poland on Tuesday reported another record daily increase in new cases, with 680 infections, after a spike driven by outbreaks amongst miners and after public gatherings. The new record comes as Poland considers introducing stricter restrictions. By 0950 GMT, the Polish zloty and the Czech crown firmed by 0.45% each to 4.3980 and 26.1750 respectively. Hungary’s forint inched up 0.1% at 344.67, while the Romanian leu lingered at 4.8350. The Hungarian central bank (NBH) said on Tuesday that it planned to “jump-start” the green bond market in the country, which will require a range of incentives by the bank and also other regulators. All stock indices rose in the region, with Prague rising for a second consecutive session by more than 0.7%. Warsaw and Bucharest’s blue-chip index rose 0.5% each, while Budapest was up 0.4%. CEE SNAPSHOT AT 1140 MARKETS CET CURRENCIES Latest Previous Daily Change bid close change in 2020 Czech 26.1850 26.3000 +0.44% -2.88% crown Hungary 344.5000 344.8300 +0.10% -3.88% forint Polish 4.4030 4.4180 +0.34% -3.33% zloty Romanian 4.8340 4.8330 -0.02% -0.95% leu Croatian 7.4680 7.4743 +0.08% -0.30% kuna Serbian 117.5200 117.6200 +0.09% +0.04% dinar Note: calculated from 1800 CET daily change Latest Previous Daily Change close change in 2020 Prague 898.58 892.1800 +0.72% -19.46% Budapest 34648.52 34620.25 +0.08% -24.81% Warsaw 1813.93 1804.38 +0.53% -15.63% Bucharest 8472.07 8431.74 +0.48% -15.09% Ljubljana 846.72 844.15 +0.30% -8.55% Zagreb 1579.44 1581.87 -0.15% -21.71% Belgrade 667.18 666.01 +0.18% -16.78% Sofia 436.05 436.59 -0.12% -23.25% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year 0.0890 0.0410 +080bps +5bps 5-year 0.3740 -0.0060 +110bps +1bps 10-year <CZ10YT=RR 0.8360 0.0090 +137bps +3bps > Poland 2-year 0.1340 -0.0060 +085bps +1bps 5-year 0.6660 -0.0220 +139bps -1bps 10-year <PL10YT=RR 1.2600 -0.0460 +180bps -3bps > FORWARD 3×6 6×9 9×12 3M interba nk Czech Rep <P 0.33 0.32 0.35 0.34 RIBOR=> Hungary <B 0.61 0.60 0.60 0.60 UBOR=> Poland <W 0.19 0.16 0.16 0.23 IBOR=> Note: FRA are for ask prices quotes ****************************************************** ******** (Additional reporting by Alan Charlish in Warsaw; Editing by Maju Samuel)

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