The leu will start running out of gas soon
The leu and the other emerging currencies will start losing ground in the coming period, the recent rally, including the joint statements of the governors in the region, being a chance to speculate on currencies in the region on short term, said the Swedish bank SEB.
The co-ordinated statements of central banks’ governors in Poland, Hungary, Romania and Czech have revived currencies in the region, which were taking an upward path. However, SEB says they will resume their bearish trend in the coming period.
“Unfortunately, I don’t think we’ve seen the worst. We think the recent rally is an attractive opportunity to open positions at short time horizon on the currencies in the region”, SEB research found.
SEB analysts agree with the central bankers in the region, who say the buyout spree of foreign currencies in the region have been exaggerated, yet, the Swedish bank says the generally rising trend has been justified.
On the other hand, SEB’s analysts exclude the possibility of a joint intervention of central banks.
“We believe the verbal intervention was an efficient intimidation tactic, as long as CEE’s central banks act to preserve the currencies as much as possible, given the further cash outflow” said SEB.
The emerging currencies in the region followed a severe year-to-date slump, losing between 6% and 12%, due to the generally negative sentiment in the region.
Central bankers in Romania, Czech, Hungary and Poland hammered out a joint action to support the local currencies, after the recent declines. However, experts stressed that the liquidities needed to be backed up by facts, to disperse fears.
BNR governor, Mugur Isarescu said the current level exchange rate was sustainable, and that BNR was ready to act in response to any move that could shake up the market.
The co-ordinated statements of central banks’ governors in Poland, Hungary, Romania and Czech have revived currencies in the region, which were taking an upward path. However, SEB says they will resume their bearish trend in the coming period.
“Unfortunately, I don’t think we’ve seen the worst. We think the recent rally is an attractive opportunity to open positions at short time horizon on the currencies in the region”, SEB research found.
SEB analysts agree with the central bankers in the region, who say the buyout spree of foreign currencies in the region have been exaggerated, yet, the Swedish bank says the generally rising trend has been justified.
On the other hand, SEB’s analysts exclude the possibility of a joint intervention of central banks.
“We believe the verbal intervention was an efficient intimidation tactic, as long as CEE’s central banks act to preserve the currencies as much as possible, given the further cash outflow” said SEB.
The emerging currencies in the region followed a severe year-to-date slump, losing between 6% and 12%, due to the generally negative sentiment in the region.
Central bankers in Romania, Czech, Hungary and Poland hammered out a joint action to support the local currencies, after the recent declines. However, experts stressed that the liquidities needed to be backed up by facts, to disperse fears.
BNR governor, Mugur Isarescu said the current level exchange rate was sustainable, and that BNR was ready to act in response to any move that could shake up the market.