FX, stocks weaken amid Russia-Ukraine tensions

Central European stocks and currencies weakened on Friday, as tensions eased in Russia and Ukraine and investors awaited clues from policy support from the US Federal Reserve.

Warsaw (.WIG20) declined sharply in European and international markets by 1.7% and 1.7% as a result of the US Federal Reserve’s monetary policy and weak economic data.

Shares of Budapest (.BUX) were down 0.63% and Prague shares were down 0.28%. Bucharest (.BETI) lost 0.93%.

 

Currencies have been trading steadily since the beginning of the year when central banks raised interest rates.

Traders say Russian Foreign Minister Sergei Lavrov and US Secretary of State Anthony Blincon are closely monitoring the meeting in Geneva today, fearing that Russia could invade Ukraine.

“Good news may help and the escalation of the conflict will hurt the entire region,” said an FX trader in Budapest. “So far it has not had a significant impact on the CEE currencies, but it could easily have been closer to the point where tensions are rising.”

Hungarian Forint traded down 0.34% on the day and traded in 357 shares.

According to Reuters analysts, the base rate is expected to rise to another 2.7 percent on another 30 basis points.

According to another trader in Budapest, the price meeting could trigger big movements at Fort speed, depending on the price increase.

“Some market participants say that the Central Bank needs to raise more than 30 points to maintain its reliability in this high inflation.”

Hungary’s inflation hit a 14-year high of 7.4% in December, in anticipation of a slowdown.

The Czech crown weakened by 0.45% and traded at 3 24,3150 after reaching a new 10-year high over the previous session.

The strengthening of the crown is at 24.20, and another strong technical hurdle is around 24.10, which could be difficult to break without any significant new positive pressures, CSOB said.

Elsewhere, the Polish Zloty fell 0.28% to 4.5286 Euros. The Romanian Leu fell by 0.01% to 4.9455 per euro.

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