Euro Dreams Fade for Zloty, Forint, Koruna on Slump

Discussion in 'Economics' started by ASusilovic, Dec 8, 2008.

  1. The slowing global economy is halting the spread of monetary union into eastern Europe and may lead to another year of losses for the Polish zloty, Hungarian forint and Czech koruna.

    The zloty fell 21 percent against the euro from a record high in July as Poland headed for its biggest economic slowdown in almost a decade, while Hungary turned to the International Monetary Fund, World Bank and European Union for a bailout as the forint weakened 15 percent. Koruna volatility almost tripled as it depreciated 12 percent. The two-year mandatory trial period before adopting the euro allows swings of no more than 15 percent.

    Poland, Hungary and the Czech Republic joined the European Union in 2004, committing to enter the 10 trillion-euro ($12.7 trillion) economy of countries sharing a single currency. The dream faded since July as the worst global financial crisis since the Great Depression drove investors from emerging markets. Now, New York-based Morgan Stanley and UBS AG in Zurich predict more foreign exchange losses in eastern Europe.

    Germany, France, Italy & Co. say a very warm "Thank you" to the expanded Eatern European marketplace.
  2. zdreg


    too early a call. a few years ago the zoltys were 4 to$ went to 2+ the $. now are 3 to $.
    i suspect that the east european countries are in better financial shape with less government debt and legacy debt than western european countries. polish people are returning home.
    it sounds like a buy not a sell.
  3. The lions are always out slaying the slowest and weakest gazelles. In this case, the Zloty, Forint and Koruna :cool:
  4. C6H12O6


    hyenas, not lions :cool:
  5. When emerging currencies become submerging currencies, be careful, be very careful. :cool: