PRAGUE: Prague stocks rose to a seven-week high on Tuesday after a tender offer lifted shares of artificial textile maker Pegas Nonwovens, while Hungary's forint firmed despite a dovish central bank holding steady as expected.
Central European currencies have gained strength in recent weeks on the back of a softer dollar, which has lost some favour as other major central banks signal they could change monetary policy. The region is trading at more than 2-year highs against the US currency.
The dollar continued to fall, hit by the latest collapse of US President Donald Trump's efforts to deliver a new healthcare bill.
The weaker dollar is helping central European currencies against the euro, the region's main trading pair. The forint was just off a one-month high against the euro on Tuesday and was bid at 306.69 at 1316 GMT, up 0.1 percent.
The forint showed little reaction to the Hungarian central bank leaving interest rates at record lows on Tuesday. The bank said it was ready to loosen policy if needed.
Analysts have forecast the bank may keep borrowing costs unchanged into 2019.
Capital Economics said, however, it may need to tighten next year. "There is a growing risk that the bank fails to shift its dovish stance, which could cause a nasty inflation shock and prompt more aggressive rate hikes further down the road," emerging Europe economist Liam Carson said.
Other currencies were mixed, with the Polish zloty up a tad and the Czech crown edging down less than 0.1 percent. The Romanian leu inched up while Bucharest stocks added 0.5 percent on Tuesday, to lead central Europe's gain.
Prague rose on the back of an almost 9 percent jump in Pegas. Czech investment group R2G launched an offer to buy the group, although analysts said the bid might not be high enough.
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