Central Europe stocks fall on fears over COVID 19

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Central Europe stocks fall on fears over COVID 19

PRAGUE, Nov 22 Reuters -- Hungary's forint hit a new all-time low on Monday and the Polish zloty was stuck around its weakest level in 12 years, under pressure from a strong U.S. dollar and concern over the worsening COVID 19 situation in central Europe. The euro fell by 0.5% to 369.67. Central European assets are being hurt by worries about lockdowns and investor appetite stunted by the stronger dollar, even though interest rates are rising quickly to counter an inflation spike. Political tensions are also appearing with a migrant crisis on Poland's border with Belarus, while Warsaw and Budapest are still locked in disputes with Brussels. On Monday, the Czech Republic and Slovakia are following examples in Austria and parts of Germany by implementing new COVID 19 measures against the unvaccinated, as the virus infections hit new highs. Austria is the first to impose a full lockdown. The lockdown in Austria and the concerns that German measures could be coming has increased fears of potential economic effects and strengthened risk aversion, a Budapest trader said. By 0923 GMT, the zloty had dropped 0.5% to 4.716 to the euro. The outlook for the Polish currency remains moderately pessimistic, although the recent series of declines in the Polish currency creates an increasing need for a technical adjustment, Bank Millennium said in a note. The EUR PLN rate should move towards the significant barrier of 4.73. The Czech crown was at its lowest since Nov. 4, the day that the central bank surprised with its biggest rate hike in nearly a quarter-century, at 125 basis points. In a podcast with Patria Finance's chief economist, Tomas Holub said he wouldn't expect a big surprise on tightening going ahead. The indexes around the region dropped, led by a 0.7% fall in Budapest.