BUDAPEST: The crown retreated on Friday along with other Central European currencies, even though the Czech central bank raised interest rates on Thursday, as emerging markets suffered amid the Turkish lira's plunge.
Hungarian oil and gas group MOL shares jumped by 2 percent after the company improved its outlook for 2018, helping to lift the Budapest stock market by 1 percent by 0900 GMT. Budapest outperformed the rest of the region, where shares were only modestly higher.
The Czech central bank raised its benchmark interest rate on Thursday, the third increase this year, as it tries to corral inflation and compensate for a weak currency.
However, the bank's outlook showed rates remaining stable next year, leaving many in the market disappointed, some traders said.
"It's the 2019 no-hikes that surprised a bit, seeing the next move in early 2020 - all that caused by expectations for a much stronger currency next year, to effectively deliver monetary tightening," Komercni Banka rates trader Dalimil Vyskovsky said in a note.
The bank raised its benchmark rate by 25 basis points to 1.25 percent, its fifth increase since last August. But the crown shed 0.2 percent by 0900 GMT to trade at 25.70. The zloty lost 0.1 percent while the forint was flat, stuck between 321 and 322 to the euro.
"Emerging market currencies were hit yesterday due to a general risk-aversion in markets and sanctions introduced by the United States against Turkey," brokerage Equilor said in a note.
Equilor analysts said emerging-market currencies could remain under pressure from a dispute between Turkey and the US The lira fell to record lows after Washington imposed sanctions on two of President Tayyip Erdogan's ministers .
Despite the weakening, Central Europe's currencies remained near multi-week highs reached in recent days, after investors closed some of the selling positions opened in the past months when the dollar rallied in global markets.
Hungary's MOL shares led a rise on the Budapest Stock Exchange after the company announced it raised its 2018 EBITDA target to around $2.4 bln from $2.2 bln. The stock surged 2 percent by 0917 GMT to 2,758 forints ($9.95).
The other main Hungarian blue-chip, OTP Bank, also jumped by one percent to 10,530 forints after the company reported earlier in the week that it signed a deal to buy Societe Generale's Bulgarian and Albanian units.
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