Newly released poor Chinese manufacturing data have led to the stocks and currencies of emerging markets in CEE becoming stronger.
Bloomberg reports that the Hungarian forint gained 0.8% against the euro, the Czech koruna rose 0.4% and the Polish zloty advanced to its strongest against the euro since May with 0.7%. The spike in Poland was also fueled by speculations on a plan to increase Poland’s VAT that will in turn fuel inflation and prompt the country’s central bank to raise interest rates.
China’s July manufacturing data were the weakest in more than a year as the government clamped down on property speculation and some investments “Relief that Chinese PMI was no worse than expected prompted a rally in risk markets,” Bloomberg cited Nick Chamie analyst in RBC Capital who wrote in a report that “the zloty rallied on renewed speculation of a rate hike this autumn.”
The forint, the fifth worst-performing currency gained against the euro after reports that Hungarian manufacturing expended in July for the first time in three month, signaling a recovery from the country’s worst recession in 18 years. The forint traded 281.76 per euro heading for its strongest level since July 15 and the biggest gain among more than 20 emerging-market currencies tracked by Bloomberg. (BBJ)