Hungarian and Polish central bankers will decide on monetary policy next week, and while no change is expected in Warsaw, Budapest’s policy makers are poised to cut interest rates.
Analysts and financial markets both expect monetary easing in Hungary Monday. All 16 private bank economists polled by Dow Jones Newswires see the Hungarian Monetary Policy Council lowering the policy rate from 9.5%, the highest in the European Union. And 13 of them expect a 50 basis-point rate cut, while the others foreseeing that or a 25 basis-point cut.
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The cost of borrowing longer-term U.S. dollars in the London interbank market fell Friday as term funding pressures eased marginally.
Data from the British Bankers’ Association showed three-month dollar Libor,
seen as a key gauge of the effectiveness of the Federal Reserve’s monetary
policy, moved down to 0.50188% from Thursday’s 0.50375%, matching Wednesday’s record low.
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USD/THB ends steady at 33.97-33.99 vs 33.98 last close. Foreign players buy but overall trade fairly thin amid absence of fresh catalysts, plus players want to avoid holding positions over weekend. “There’s nothing new to drive the market. The dollar/baht should hover around this level for quite a while,” says local dealer. Central bank’s downward revision to 2009 GDP but bullish stance on 2010 economy was widely expected, thus had little impact on market. Resistance tipped at 34.10, support at 33.80.