BUCHAREST: The Czech crown led regional gains on Wednesday, boosted by stronger-than-expected manufacturing data depicting continuous economic growth, though trading was light with Polish and Hungarian markets closed for All Saints Day holiday.
Czech manufacturing business sentiment jumped to a six-year high in October due to expanding output and new orders, the Markit Purchasing Managers’ Index (PMI) showed.
The headline PMI reading rose to 58.5 in October from 56.6 in September, data compiled by IHS Markit showed. Analysts polled by Reuters forecast a 57.0 reading. A reading of 50 divides expansion from contraction.
By 1010 GMT, the crown had firmed 0.24 percent to 25.5970 versus the euro. The Romanian leu traded virtually unchanged at 4.6030 and the Serbian dinar edged up 0.1 percent.
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Prague’s stocks rose 0.4 percent on the day, chiefly helped by a 1.3 percent rise in CEZ shares to a fresh two-year high of 489.20 crowns.
A Reuters poll showed analysts expect the Czech central bank, which began raising interest rates in August, to lift its 0.25 percent two-week repo rate again on Thursday.
“The Czech National Bank (CNB) is highly likely to hike its policy rate by 25 basis points at Thursday’s meeting, following a 20-basis-point hike in August and the removal of the Swiss-type euro/crown floor in April,” Anders Svendsen, Nordea chief analyst said in a note.
“The CNB almost seems eager to strengthen the CZK, which is already 5 percent stronger against the euro year to date.”
Source: Brecorder.com
