*Zloty seen firmer vs euro 5 pct in 6 mths, 11 pct in 12
mths
*Crown seen firmer 2 pct in 6 mths, 4 pct in 12 mths
*Forint seen firmer 1 pct in 6 mths, 3 pct in 12 mths
*Leu seen weaker by 1.5 pct in 6 mths, flat in 12 mths
For details of the poll please see <CEEFXPOLL01>. For
analyst comments please click on []
By Sandor Peto
BUDAPEST, June 4 (Reuters) - Latvia's market turmoil poses
short-term risks to Central Europe's main currencies but most of
them are still seen posting gains by late this year, a monthly
Reuters poll of analysts showed on Thursday.
According to the poll of 39 economists conducted between
June 1 and 4, Poland's zloty <EURPLN=> is expected to well
outperform its regional peers in the next one year, while
Romania's leu<EURRON=> is seen as an underperformer.
The zloty is expected to firm five percent against the euro
in six months from the levels where it closed last month to 4.3,
and by 11 percent in 12 months.
"...We believe that regional currencies will benefit from
gradually improving global economic picture, which should be
supportive to appetite for riskier assets," said Radomir Jac of
Generali PPF Asset Management in Prague.
The Czech crown <EURCZK> is seen gaining two percent in six
months to 26.4 and four percent in 12 months, while the
Hungarian forint <EURHUF=> is expected to firm by one percent to
280 in six months and by 3 percent in the next one year.
The leu, however, is expected to weaken by 1.5 percent to
4.25 by late this year, to recover to 4.2 in the next 12 months.
The region's currencies, vulnerable to shifts in global risk
appetite, fell in 2008 from the year's peaks by up to 30
percent, and extended their losses this year, led by the zloty
and the forint which have shed about 8-9 percent.
The new European Union members in the bloc's eastern part
are reliant on exports and foreign financing, and the
performance of their assets will remain greatly dependent on
global economic and market trends, analysts said.
Most economies in the region are seen sliding into deep
recession this year. Poland's economy is expected to slow but
still grow slightly.
BUMPY ROAD, DIFFERENTIATION
However, the road of market recovery will be shaky as
indicated by the currencies' falls this week due to concern that
Latvia will devalue its lat, analysts said.
Latvia's problems are more likely to affect the markets of
neighbouring Baltic countries or Bulgaria which has a similar
currency peg rather than the main Central European countries
which have free floating currencies.
But there may be spillover impacts all over the region,
especially in countries which have weaker fundamentals like
Hungary or Romania and are more vulnerable to changes in the
global appetite for risk than others, analysts said.
"Optimism in international markets will not be huge (in the
short term), it will increase and decrease in waves in the next
six-nine months," said ING Bank's David Nemeth in Budapest.
"Then Hungary will have elections, which mixes further
uncertainty into the picture."
Political uncertainty may affect the outlook of other
currencies, like the crown, and possible central bank interest
rate cuts in the region to help the economies recover is also a
key uncertainty factor cited by the analysts.
"Key (central bank interest) rate cuts are likely to
continue to be coupled with liquidity injections and eventual
reserve requirements cuts (for banks) and these are likely to
weigh on the leu," said Vlad Muscalu of ING Bank in Bucharest.
The zloty is likely to weaken cyclically at the end of each
month as currency options struck by local companies last year
expire, but the impact is seen diminishing later this year.
(Reporting by Sandor Peto)
