BUDAPEST, June 24 (Reuters) - Central European currencies
were broadly unchanged in early trade on Wednesday, supported by
a weaker dollar and awaiting the Polish rate decision due later
in the day.
Poland's central bank is expected to cut its key interest
rate by 25 basis point to 3.5 percent but the move has already
been priced in. []
"The key event today will be the rate decision by the Polish
Monetary Policy Committee as well as the main points from the
new inflation projection by the central bank, i.e. the inflation
path and gross domestic product," Bank BPH wrote in a note.
A 25 basis point rate cut "should come as neutral," BPH
added. "In the event of a very pessimistic GDP path in the
projection, one could expect downward pressure on the zloty
towards 4.60 per euro."
Danske Bank added in a note that the move should be the end
of the easing cycle in Poland.
The zloty traded a shade stronger than Tuesday's close, at
4.54 against the euro, while the Czech crown, which retreated
from earlier highs on Tuesday, was a tad weaker still at 26.25
at 0715 GMT.
In Prague, dealers and analysts expected some stabilisation
after a sharp, 3 percent gain by the crown in the past week that
made it one of the best performing global currencies.
"It was a significant move and now the area (of 26.30-40 to
the euro) represents strong resistance; so I expect some
stabilisation," said Jan Vejmelek, head of economy and strategy
research at Komercni Banka.
The market has mostly priced an interest rate cut by the
Czech central bank on Thursday, so analysts said the eventual
move is unlikely to affect the crown. []
"The interest rate differential is not a key mover of the
(crown) exchange rate," Vejmelek said.
Romania's leu firmed slightly on the back of a weaker dollar
and a rebound in stocks.
"Let's wait and see Poland's monetary policy decision, which
carries weight," said a dealer in Bucharest.
Analysts expect Romania to cut 50 basis points from its 9.5
percent key rate next week, leaving Hungary's recession-hit
economy with the highest interest rates in the European Union.
Hungary left its rate unchanged at 9.5 percent on Monday.
Recent comments made by Romanian central bankers bolstered
expectations for further cautious monetary policy easing in
Bucharest in the months ahead.
Dealers said the Romanian central bank is unlikely to favour
sharp cuts that put the leu currency under pressure, in spite of
the recent easing in inflation and growing concerns about the
depth of this year's recession.
The leu has been one of the most stable currencies in the
region since March, broadly hovering around 4.2 to the euro and
only in a 4.1-4.3 range.
The Hungarian forint was a third of a percent firmer to
trade around 280.8 against the euro, but trading remained very
thin.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.249 26.2 -0.19% +1.92%
Polish zloty <EURPLN=> 4.538 4.545 +0.15% -9.32%
Hungarian forint <EURHUF=> 280.97 281.77 +0.28% -6.2%
Croatian kuna <EURHRK=> 7.31 7.292 -0.25% +0.75%
Romanian leu <EURRON=> 4.224 4.233 +0.21% -4.96%
Serbian dinar <EURRSD=> 94.117 93.423 -0.74% -4.93%
All data taken from Reuters at 0921 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Reuters bureaux, writing by Marton Dunai;
Editing by Ruth Pitchford)
