CEE MARKETS-Forint lowest since March, zloty weak before Polish rate decision

          WARSAW, Oct 2 (Reuters) - The Hungarian forint fell to
its weakest against the euro in 6-1/2 months on Wednesday, while
the Czech crown hit a new eight-week low and the zloty eased
before a Polish rate decision.
    Falling interest rates in Hungary and the Czech Republic
have put pressure on those countries' currencies, while the
zloty has been supported as the Polish central bank paused rate
cuts for the past year.
    The zloty is still within sight of multi-year highs hit
earlier this year.
    Economists polled by Reuters expect the National Bank of
Poland to extend that pause and maintain its base interest rate
at 5.75% on Wednesday, as inflation rebounds above target.
    By 0935 GMT the zloty was down 0.1% against the
euro at 4.296, nearing the psychological 4.30 level it has
remained below since mid-September.
    A Warsaw-based trader said the zloty would likely breach the
that level on Wednesday as escalation of the conflict in the
Middle East this week weighed on currencies.
    "A stronger dollar, higher oil prices - this also has an
impact on the currencies of emerging markets, including the
zloty," the trader said.
    "All this is happening against the backdrop of the (Polish)
monetary policy council, (U.S.) payrolls on Friday, but I think
this global factor is dominant at the moment," the trader said,
referring to the escalation in the Middle East conflict.
    The dollar held onto its biggest gains in a week on
Wednesday after an Iranian missile attack on Israel.
    In Hungary, the forint lost 0.3% to 399.25 per
euro and touched its lowest level since mid-March.
    "The FX market has fully switched into risk-off mode," ING
said in a note.
    ING said a growing divergence between central and eastern
European currencies and the region's interest rates market will
have to be closed at some point, allowing for the currencies'
weakness to fade.
    "The Polish zloty seems most appealing with the central bank
meeting this week, while the Czech koruna may be attractive
later," ING said. "The Hungarian forint, on the other hand, will
have the hardest path to finding stable ground within the CEE
peers."
    The Czech crown was 0.2% lower to the euro at
25.33 to the euro, sitting around lows from early August.

          CEE      SNAPSHOT     AT
          MARKETS              1135
                               CET
                   CURRENCIES
                   Latest      Previo  Daily       Change
                               us
                   trade       close   change      in 2024
 Czech    0
 Hungary  00
 Polish   Romania  Serbian  00
 Note:    calculated from              1800 CET
 daily
 change

                   Latest      Previo  Daily       Change
                               us
                               close   change      in 2024
 Prague               1597.65  1604.5      -0.43%   +12.99
                                  300                    %
 Budapes             74324.54  74189.      +0.18%   +22.61
 t                                 72                    %
 Warsaw   6
 Buchare             17495.20  17568.      -0.42%   +13.82
 st                                14                    %

                                       Spread      Daily
                                       vs Bund     change
                                                   in
 Czech                                             spread
 Republi
 c
          Poland
          0
          FORWARD RATE
          AGREEMENTS
                   3x6         6x9     9x12        3M
                                                   interba
                                                   nk
 Czech    Hungary  Poland   Note:    are for ask prices
 FRA
 quotes
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 (Reporting by Karol Badohal in Warsaw, Jason Hovet in Prague
and Anita Komuves in Budapest. Editing by Jane Merriman)