WARSAW, July 24 (Reuters) - Central European currencies were a touch stronger on Thursday, with the Czech crown at its highest level in 13 months, ahead of an interest rate decision by the European Central Bank and the possibility of a trade agreement between the European Union and the United States.
On Wednesday, EU diplomats said the European Union was heading towards a trade deal with Washington that would result in a broad 15% tariff on EU goods imported into the U.S., avoiding a harsher 30% levy slated to be implemented from August 1.
However, the White House later stated that discussion about any possible trade deals with the United States should be considered "speculation", unless they are announced by President Donald Trump.
The market is currently awaiting the ECB's interest rate decision – the consensus assumes they will remain unchanged, and the ECB president's narrative will be key.
"Speculation about a possible trade agreement between the EU and the U.S. benefits the crown ... Today's ECB meeting should not bring any big surprises and the differential between the Czech and euro market rates will not move much," Czech bank CSOB said.
"It will be difficult for the crown to move further towards significantly stronger levels without certainty about the form of trade relations between the EU and the U.S."
The Czech crown EURCZK= traded at 24.57 per euro at 0816 GMT, near the strongest level in 13 months. The Hungarian forint EURHUF= was a touch up at 398.30.
"During yesterday’s trading, the euro-forint exchange rate approached the 398 support level, which remains a very important and strong threshold," brokerage Equilor said in a report.
"If this level were to break, it could open further room for the forint to strengthen. On the upside, the key resistance zone is still observed in the 400-401 range."
The Polish zloty EURPLN= traded within its recent range at 4.2505 to the euro. Investors are waiting for the ECB's decision and they mostly ignored a Polish government reshuffle announced on Wednesday.
"The zloty is consistently expanding its narrowed sideways trend, hovering around the 4.25 level. Anticipation for today's decision by the European Central Bank is dominating," ING analysts wrote in a note.
"In our opinion, the scenario for EUR/PLN prices in the coming days will remain a concentration around the aforementioned 4.25 level, with low volatility."
The Romanian leu EURRON= was stable at 5.07 per euro after S&P Global affirmed Romania's sovereign credit ratings at "BBB-/A-3", the last rung of investment grade.
CEE MARKETS SNAPSHOT AT 1016 CET | |||||
CURRENCIES | Latest trade | Previous close | Daily change | Change in 2025 | |
Czech crown | EURCZK= | 24.5700 | 24.5900 | +0.08% | +2.60% |
Hungary forint | EURHUF= | 398.3000 | 398.5000 | +0.05% | +3.30% |
Polish zloty | EURPLN= | 4.2505 | 4.2530 | +0.06% | +0.62% |
Romanian leu | EURRON= | 5.0700 | 5.0698 | -0.00% | -1.84% |
Serbian dinar | EURRSD= | 117.0800 | 117.1800 | +0.09% | -0.11% |
Note: daily change calculated from 1800 CET | |||||
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STOCKS | Latest | Previous close | Daily change | Change in 2025 | |
Prague | .PX | 2198.36 | 2192.6500 | +0.26% | +24.89% |
Budapest | .BUX | 101003.48 | 100868.31 | +0.13% | +27.33% |
Warsaw | .WIG20 | 2947.02 | 2946.62 | +0.01% | +34.44% |
Bucharest | .BETI | 19774.36 | 19734.44 | +0.20% | +18.26% |
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BONDS | Yield (bid) | Yield change | Spread vs Bund | Daily change in spread | |
Czech Rep 2-year | CZ2YT=RR | 3.5270 | 0.0180 | +167bps | -4bps |
Czech Rep 5-year | CZ5YT=RR | 3.8200 | 0.0120 | +159bps | -7bps |
Czech Rep 10-year | CZ10YT=RR | 4.2720 | 0.0160 | +160bps | -6bps |
Poland 2-year | PL2YT=RR | 4.3720 | -0.0060 | +252bps | -6bps |
Poland 5-year | PL5YT=RR | 4.8910 | 0.0190 | +266bps | -6bps |
Poland 10-year | PL10YT=RR | 5.4680 | 0.0190 | +279bps | -6bps |
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FORWARD RATE AGREEMENTS | 3x6 | 6x9 | 9x12 | 3M interbank | |
Czech Rep | CZKFRA, PRIBOR= | 3.51 | 3.48 | 3.47 | 3.49 |
Poland | PLNFRA, WIBOR= | 4.48 | 4.07 | 3.76 | 4.96 |
Note: FRA quotes are for ask prices | |||||