Wednesday, 26 August 2015 17:28
BUDAPEST: Central European currencies slipped on Wednesday as worries persisted that China’s economic slowdown would lead to further declines in the price of emerging market assets.
Stocks were little changed after seeing their biggest swings for years earlier this week.
Among currencies, the Polish zloty shed 0.1 percent against the euro by 0825 GMT. The Czech crown, the forint and the leu fell 0.2 percent.
“The forint has weathered both the Greek crisis and the Chinese worries quite well,” one Budapest currency dealer said. “We don’t expect negative local news… so the forint can even outperform the currency of Poland, where elections will come soon.”
The crown stayed near its weakest levels since July, after trading for weeks near the central bank’s cap on its value of 27 against the euro. Czech government bond auctions on Wednesday will test whether the crown’s weakening has affected demand for the debt.
Central European bonds were mixed after a rise in yields early this week. Poland’s 10-year yield dropped 3 basis points to 2.94 percent. Hungary’s comparable yield was flat at 3.77 percent.
Regional stock indices changed less than 1 percent, after swings 5 to 7 percent in the previous two sessions.
Warsaw’s blue-chip index rose 0.3 percent. Shares of Poland’s biggest utility, PGE, regained most of their losses after plunging almost 5 percent at the open. The company had disclosed the biggest impairment on asset value on the Polish stock exchange.
Shares of the country’s biggest bank, PKO BP, gained half a percent, after Prime Minister Ewa Kopacz said Poland needed to consider the stability of banks when it dealt with Swiss franc loans. The lower house of parliament passed a bill that would saddle banks with the cost of converting such loans to zlotys.
Croatia also announced the conversion of Swiss franc loans on Tuesday.
The kuna was flat at 7.555 against the euro.
