By Anita Komuves
BUDAPEST, Oct 22 (Reuters) - Central European currencies
recouped some losses on Tuesday, putting the forint on stronger
ground before a widely expected pause in the Hungarian central
bank's policy easing.
A Reuters poll showed analysts expect Hungary's central bank
to keep its rate at 6.50%, halting cuts for now
despite inflation falling to its 3% target for the first time
since 2021.
The forint, central Europe's worst performing currency so
far in 2024, has weakened sharply in recent weeks, raising
speculation of a rebound in price growth and shifting
expectations to a pause in rate cuts.
The forint was up 0.2% on the day on Tuesday, at
400.95 versus the euro. It has lost nearly 4.5% since the start
of the year.
"The main question for today is how long the pause in the
cutting cycle is ... Despite the market already being on the
hawkish side, (the bank) will not have an easy job today and
communication will be key," ING analysts wrote in a note.
"However, we believe the central bank is aware of the
fragile situation and therefore the HUF could see some gains
today, but it is probably too early for any significant recovery
and every gain could be short-lived," they said.
The forint fell beyond the psychological 400-per-euro level
this month for the first time since March 2023.
Central Bank Deputy Governor Barnabas Virag said last week
that the bank may pause rate cuts this month - and for longer if
warranted by external risks and the inflation outlook.
In Poland, the zloty added 0.1% on the day to
4.3135 per euro, recovering some losses from the previous
session. The Czech crown was little moved at 25.268.
Central European currencies have recently come under
pressure from uncertainties over the upcoming U.S. presidential
election, with chances of a Donald Trump victory helping the
U.S. dollar and weighing on the region's assets, analysts say.
On Tuesday, the dollar clung to a 2-1/2 month high on
expectations the U.S. Federal Reserve will take a measured
approach to rate cuts.
"The crown is staying in a lightly defensive position," CSOB
bank said. "In the coming sessions, we do not expect any
significant improvement (as) nervousness before U.S. elections
will be evident in risk assets sensitive to a rise in U.S.
market rates."
CEE SNAPSHOT AT
MARKET 1021
S CET
CURRENCIE
S
Latest Previo Daily Change
us
trade close change in 2024
EURCZK Czech 0
EURHUF Hungary 00
EURPLN Polish EURRON Romania EURRSD Serbian 00
Note: calculated from 1800 CET
daily
change
Latest Previo Daily Change
us
close change in 2024
.PX Prague 1625.74 1627.5 -0.11% +14.97
200 %
.BUX Budapes 74307.67 73990. +0.43% +22.58
t 26 %
.WIG20 Warsaw 5
.BETI Buchare 39 %
Spread Daily
vs Bund change
in
Czech spread
Republi
c
CZ2YT= CZ5YT= CZ10YT Poland
PL2YT= PL5YT= PL10YT FORWARD RATE
AGREEMENTS
3x6 6x9 9x12 3M
interba
nk
Czech Hungary Poland Note: are for ask
FRA prices
quotes
*********************************************
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(Additional reporting by Jason Hovet in Prague and Alan
Charlish in Warsaw; Editing by Mark Potter)
Line of Credit 
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