Central European government bond prices eased slightly on Friday in month-end adjustments and as an official revise-up of fourth-quarter Polish GDP tipped the balance towards a smaller interest rate cut next week in Poland.
Some investors took profits after a rally in the past days, which was partly fuelled by expectations that Poland will on Wednesday make the first of a series of rate cuts in the region.
Traders said Hungarian bonds, however, could get new impetus next week if Poland cuts rates or if Moody’s improves its stable outlook on Hungary’s junk credit rating in a review due next Friday.
The forint is buoyed by the ECB’s u%oming QE and investors’ expectations that two of the three major credit rating firms may improve their outlook on Hungary’s rating within a month, Commerzbank noted on Friday. Should they upgrade their rating outlook, the forint could firm to below the 300 mark against the EUR, Commerzbank adds. The last time it was under 300 to the euro was January 17 last year.
Late afternoon revised-down US GDP data pressured the dollar.
The forint traded at 270.05 to the dollar, a bit up from 270.38 late Thursday. On Friday, it moved between 269.45 and 271,29, a one-week low. It scaled a three-week high at 266.61 early Thursday.
It was quoted at 284.28 to the Swiss franc, down from 283.62 late Thursday. Its range on Friday was 283.21 to 285.78, a five-day low, after reaching the highest at 281.25 Thursday intraday since its crash to an all-time low at 378.49 on January 15 when the Swiss central bank scrapped its cap of 1.20 to the euro.
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