U.S. dollar hits 9 - 1 2 months high in early trading


By Alan Charlish Aug 20 - Central European currencies were softened in early trading on Friday after an earlier weakening in the previous session, as the dollar firmed on expectations of early tapering by the U.S. Federal Reserve. Wednesday's Fed minutes showed that officials largely expect to reduce their monthly bond buying later this year, strengthening the dollar. The greenback hit a 9 - 1 2 months high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery just as central banks begin to reverse Pandemic stimulus. There is currently one general sentiment: it is the appreciation of the dollar, said Piotr Poplawski, senior economist at ING in Warsaw. We think that the appreciation of the dollar, if it actually continues over 1.17, is going to be negative for CEE FX and we are going to see further depreciation. A stronger dollar generally means investors have less risk appetite, denting the appeal of emerging market currencies. The Polish currency was 0.04% weaker against the euro at 25.4910 GMT, while the Czech economy was 0.03% weaker at 4.5870. There is virtually no liquidity, especially from fixings, said Poplawski. In Hungary, where markets were closed for a holiday, the forint was 0.07% stronger at 350.80. Stock markets followed mostly global peers lower, with Warsaw's PX index and Prague's WIG 20 - Index falling 0.40% and 0.45%, respectively, amid rising COVID - 19 cases and fears of a sooner-than-expected tapering in monetary stimulus. The retailer Dino Polska increased to about 5% in Warsaw after its second quarter results. Trigon DM analyst Grzegorz Kujawski said Dino's shares took a hit from a lower-than-expected net margin on sales. The Czech 10-year bond yield was little changed at 1.717%, while the Polish 10 year bond yield was 2.7 basis points lower at 1.826%