(Recasts with Hungarian c.bank move) WARSAW, Sept 24 (Reuters) - The Hungarian forint firmed on Thursday, after the central bank unexpectedly raised the interest rate on its one-week deposit facility by 15 basis points to 0.75%. The forint had weakened in recent weeks due to the impact of a second coronavirus wave on economic recovery and rising inflation. But the rate move lifted it immediately from five-month-lows around 365 versus the euro to around 363.5. Market players said, however, that trend may not last. At 1029 GMT the forint was 0.42% stronger on the day at 363.78. Other Central European currencies were softer, taking a hit from a global risk sell-off on fears that rising coronavirus cases are slowing economic recovery. Europe has seen a surge, with Poland reporting a new record daily number of cases on Thursday. In the Czech Republic, the surge has been growing at the second fastest rate in Europe when adjusted for population, behind only Spain. "The epicentre of negative effects of the second wave of the coronavirus is in Europe. CEE currencies must compensate for expected reduced demand from Europe given the worsening business sentiment there," said Piotr Bartkiewicz, an economist at Pekao SA. At 1029 GMT the Polish zloty was 0.40% softer against the euro at 4.5285, the Czech crown was 0.17% weaker at 26.9870 and the Romanian leu was 0.05% weaker at 4.8740. The crown did not get any strong impulse from the Czech National Bank (CNB) on Wednesday after rate setters left the key rate unchanged at 0.25% as expected. Stocks mostly fell, taking their cue from global markets rattled by rising infection rates and fading hopes of fresh stimulus for the U.S. economy. The main indices in Budapest and Warsaw fell 1.53% and 0.65% respectively, while Prague's PX index was broadly flat. Czech 10-year bond yields fell just under 2 basis points to 0.865%, while Polish 10-year yields fell almost 3 basis points to 1.335%. "...in the case of 10-year papers it will not be easy to break the 1.30% level, despite positive sentiment in the global debt market," PKO BP analysts in Warsaw said in a note. "Therefore, it seems more probable that the yields will return to 1.40% on the longer end of the curve." CEE SNAPSHO AT MARKETS T 1229 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 Czech <EURCZK= 26.9870 26.9400 -0.17% -5.76% crown > Hungary <EURHUF= 363.780 365.300 +0.42% -8.97% forint > 0 0 Polish <EURPLN= 4.5285 4.5102 -0.40% -6.01% zloty > Romanian <EURRON= 4.8740 4.8714 -0.05% -1.76% leu > Croatian <EURHRK= 7.5490 7.5505 +0.02% -1.37% kuna > Serbian <EURRSD= 117.500 117.600 +0.09% +0.06% dinar > 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2020 Prague 861.93 861.690 +0.03% -22.74% 0 Budapest 32018.9 32515.3 -1.53% -30.52% 5 9 Warsaw 1674.40 1685.40 -0.65% -22.12% Buchares 9063.00 9110.46 -0.52% -9.16% t Ljubljan <.SBITOP 839.99 834.77 +0.63% -9.27% a > Zagreb 1629.57 1645.58 -0.97% -19.23% Belgrade <.BELEX1 688.11 688.57 -0.07% -14.17% 5> Sofia 424.55 425.11 -0.13% -25.27% Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year <CZ2YT=R 0.0710 -0.0100 +078bp -1bps R> s 5-year <CZ5YT=R 0.4760 -0.0850 +120bp -6bps R> s <CZ10YT= 0.8650 -0.0180 +139bp +0bps 10-year RR> s Poland 2-year <PL2YT=R 0.0480 -0.0510 +075bp -5bps R> s 5-year <PL5YT=R 0.6450 -0.0260 +137bp +0bps R> s <PL10YT= 1.3350 -0.0290 +186bp -1bps 10-year RR> s FORWARD 3x6 6x9 9x12 3M interba nk Czech 0.32 0.33 0.35 0.34 Rep <PRIBOR= > Hungary 1.01 1.14 1.25 0.65 Poland 0.19 0.19 0.19 0.22 Note: are for ask FRA prices quotes ********************************************* ***************** For related news and prices, click on the codes in brackets: All emerging market news Spot FX rates Eastern Europe spot FX Middle East spot FX Asia spot FX Latin America spot FX Other news and reports World central bank news Economic Data Guide Official rates Emerging Diary Top events Diaries Diaries Index (Reporting by Alan Charlish in Warsaw, Jason Hovet in Prague, Anita Komuves in Budapest, Luiza Ilie in Bucharest; Editing by Ramakrishnan M. and Andrew Cawthorne)
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