Currencies nearly flat ahead of Polish central bank rate decision
- The zloty was little changed, edging up 0.1% to 4.5245 per euro.
- "Until the decision is published, volatility in the domestic market should remain limited," Bank Millenium wrote in a note.
BUDAPEST: Central European currencies were little changed on Wednesday, ahead of the Polish central bank's monetary policy meeting outcome, where analysts expect it to keep rates on hold, although some see a chance for another rate cut this year.
The zloty was little changed, edging up 0.1% to 4.5245 per euro.
"Until the decision is published, volatility in the domestic market should remain limited," Bank Millenium wrote in a note.
"The message may be the source of volatility, as long as the Council emphasizes even stronger determination to maintain the weak zloty," they added.
Of 21 analysts polled by Reuters, 19 expected the main interest rate to remain stable at 0.1%.
However, some analysts think that the rate could be cut this year as December inflation came in lower than expected and central bank governor Adam Glapinski said that a rate cut could be possible in the first quarter if there is a third wave of the pandemic.
Elsewhere, the Hungarian forint edged down 0.07% to 359.30.
"Trade is quiet, investors are waiting for the Polish rate decision," a Budapest-based trader said. "If rates remain unchanged, then the forint and the zloty could firm."
Fresh economic data from the Czech Republic and Romania underlined the effects of the second wave of the pandemic on the region.
Czech headline inflation eased to a two-year low in December, putting the year-on-year rate at 2.3%. Retail sales excluding cars and motorcycles fell by 7.0% year-on-year in November.
The Czech finance ministry will hold its first bond auctions of the year later in the day.
Romania's adjusted industrial output fell 0.6% month-on- month in November, and was up 0.4% from a year ago.
The Czech crown slid 0.14% to trade at 26.200 per euro, while the Romanian leu was little moved.
Budapest's stocks were up 1.58% as Pharmaceutical company Richter jumped 7.5% by 1019 GMT, after media reports that its US partner AbbVie said in a presentation it saw peak sales of Vraylar, a key antipsychotic drug, at $4 billion with currently approved indications.
Warsaw's equities were down 0.89%, while Bucharest gained 0.84% and Prague slid 0.02%.
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