* Polish rate hike expectations support region's FX
* Inflation data due up, higher reading can give boost
* Crown at late-2008 high, dampens Czech rate outlook
PRAGUE, Jan 13 (Reuters) - Central European currencies'
rally paused on Thursday with a dip in the euro and stocks, with
analysts looking to Polish inflation for signs of whether the
central bank could raise interest rates as early as next week.
After a raft of comments from bank policymakers, a Reuters
poll this week showed 17 of 29 analysts expect a hike next
Wednesday, a shift from a poll earlier this month that had only
two of 21 analysts forecasting a January hike. []
The zloty has jetted to a nine-month high in response, also
boosting its regional peers, while improving economic data has
supported currencies that are already up 1-3 percent in 2011.
The zloty <EURPLN=> slipped 0.4 percent to the weak side of
3.85 to the euro by 0836 GMT, while the Czech crown <EURCZK=>
dipped 0.2 percent to 24.36 per euro, off a more than two-year
high hit late in Wednesday's session.
The Hungarian forint <EURHUF=> and Romanian leu <EURRON=>
held steady, falling less than 0.1 percent.
Stocks in the region lost up to 0.3 percent. The euro, the
region's reference currency, dipped after a rally following a
successful Portuguese bond auction on Wednesday, with concerns
about a debt crisis continuing to weigh.
Polish inflation at 1300 GMT is forecast at 3.1 percent
year-on-year -- well above the central bank's 2.5 percent
target. <ECONPL> A higher figure would feed expectations of a
rise in rates -- and support the zloty.
"Should the inflation rate exceed market expectations today,
the market will be targeting the next support level at 3.8238,"
Commerzbank said.
That is close to the zloty's 2010 high. The zloty passed
3.85 this week -- a level at which the central bank surprised
markets last April by intervening for the first time since
introducing a free float in 2000.
CZECH, HUNGARIAN RATES ADJUST
Poland would follow Hungary, which has raised rates by 50
basis points in two moves since November. Hungarian central bank
minutes on Wednesday showed divisions and increased uncertainty
about a decision later this month. []
Czech forward markets price in a rate hike in six months.
Central bank board member Pavel Rezabek said on Wednesday a
rise in Czech inflation at the end of 2010 may prompt the
central bank to hike borrowing costs sooner than late-2011, as
the bank's forecast suggests. []
Short-dated interest rate swaps rose on the comments.
Komercni Banka, which this week recommended receiving a
two-year Czech interest rate swap <CZKAM6PR2Y=> against paying
6-month PRIBOR <CZK6MD=>, said in a daily trading note that
expectations still looked excessive. []
"With the crown the strongest since late 2008, it seems to
be pretty much unrealistic to expect a rate hike now," it said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.36 24.318 -0.17% +2.63%
Polish zloty <EURPLN=> 3.852 3.838 -0.36% +2.75%
Hungarian forint <EURHUF=> 275.35 275.33 -0.01% +0.96%
Croatian kuna <EURHRK=> 7.4 7.398 -0.03% -0.27%
Romanian leu <EURRON=> 4.254 4.251 -0.07% -0.49%
Serbian dinar <EURRSD=> 105.26 105.32 +0.06% +0.63%
All data taken from Reuters at 0937 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
Spot FX rates
Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Jason Hovet; editing
by Patrick Graham)
