By Krisztina Than
BUDAPEST, Dec 16 (Reuters) - Central European currencies retreated slightly on Tuesday, with the forint easing 0.2% ahead of a Hungarian central bank meeting, which is expected to keep rates on hold, although investors are looking for hints of a dovish shift.
Hungary's forint has surged 6.8% so far this year, outperforming its regional peers and the bank is expected to lower its 2026 inflation projection on Tuesday. As a result, the focus will be on the post-meeting statement.
"In the September projection, inflation for next year was put at 3.8%, while in late November Governor Mihaly Varga already projected inflation of only 3.4-3.6% for 2026," brokerage Equilor said in a note.
"The key question is how much emphasis this change will receive in the statement and whether it could even serve as a preparatory step toward a future shift in communication."
The bank has said the projection in its December inflation report "was going to be crucial from the perspective of next year's monetary policy stance."
The forint was down 0.2% at 385.30 at 0841 GMT, after a rally that has been supported by Hungary's 6.5% benchmark rate offering a hefty carry trade.
Globally, investors were focused on upcoming U.S. economic data this week.
CAUTIOUS STANCE
A Reuters poll on Friday showed analysts expect the Hungarian central bank to leave rates unchanged for a 15th straight month on Tuesday. The median forecast projects only 50 basis points of rate easing by the end of next year.
The Czech central bank, which meets on Thursday, last cut rates in May and some analysts say they could remain unchanged for all of 2026.
The Czech crown traded a touch weaker at 24.33 per euro, off a peak of 24.1 hit at the start of the month.
Czech bank CSOB said the crown was holding its position around 24.30 EUR/CZK for now.
"In the case of the CNB, we do not think the crown will have much to profit from the meeting (on Thursday) - rate stability and hawkish rhetoric are fully priced in the market and the bar for any surprises is set very high," the bank said.
The Polish zloty, which has firmed only 1.3% this year, also retreated 0.2% versus the euro, trading around 4.222, still hovering off its 8-month high hit on Monday amid ongoing negotiations to end the war in Ukraine.
ING Bank said a slightly higher inflation print for November than that estimated earlier may also have helped the zloty's gains.
"Despite yesterday's strengthening of the zloty, we remain skeptical about the possibility of a sustained decline of the euro/PLN exchange rate below 4.2150," they added.
CEE MARKETS SNAPSHOT AT 0941
CET
CURRENCIES Lates Previo Daily Change in
t us chang 2025
trade close e
Czech 30 0 %
Hungar 000 00 %
forint
Polish 5 %
Romani 8 %
Serbia 400 00 3%
dinar
Note: daily change calculated from 1800
CET
STOCKS Lates Previo Daily Change in
t us chang 2025
close e
Prague 2598. 2583.0 +0.5 +47.61%
21 300 9%
Budape 10999 109506 +0.4 +38.67%
st 9.00 .37 5%
Warsaw 54 7 %
Buchar .09 15 7%
BONDS Yield Yield Sprea Daily
(bid) change d vs change in
Bund spread
Czech 0 bps
2-year
Czech 0 bps
5-year
Czech 0 0 bps
10-yea
r
Poland 0 0 bps
Poland 0 0 bps
Poland 0 0 bps
r
FORWARD RATE 3x6 6x9 9x12 3M
AGREEMENTS interbank
Czech Poland Note: FRA quotes are for ask
prices
(Reporting by Jason Hovet)
(Reporting by Jason Hovet in Prague, Krisztina Than in Budapest, and Karol Badohal in Warsaw
Editing by Sharon Singleton)
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