July 2 (Reuters) - Central European currencies are expected to retreat in the next months after the past weeks' strong gains, but are set to firm in the next 12 months, a Reuters poll of analysts showed on Thursday.
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ON REGION
Radomir Jac, Generali PPF Asset Management, Prague
"Most currencies in the Central European region firmed more than expected in the past weeks, particularly the forint and Czech crown. We think that particularly the forint may correct its recent gains in weeks to come: last but not least because the NBH (central bank) is likely to restart its monetary policy easing cycle in the summer months...In a medium-term perspective the strategic view remains positive, as we believe the region's currencies will benefit from gradually improving global economic picture, which should be supportive to appetite for riskier assets, including the Central and Southest European currencies."
Balint Hada, Quaestor, Budapest
"Thanks to (financing from) the World Bank, IMF and the European Union, the countries of Eastern Europe received massive financial support that reinforced investors' confidence in our region but the financial situation is still fragile and trading is still based on sentiment."
Maja Goettig, Bank BPH, Warsaw
"The key mid-term risk factor for the zloty is the potential deep correction of the recent global markets rally driven by excessive optimism over the pace of the global economic recovery. Another risk factor is renewed concern over devaluation in Latvia if it turns out IMF and EU support is not enough, which would negatively weigh on CEE currencies including the zloty."
ON ZLOTY
Maja Goettig, Bank BPH, Warsaw
"The expiration of currency options, which visibly weighed on the zloty in the past months, should fade towards the end of this year."
Radoslaw Cholewinski, Noble Bank, Warsaw
"The zloty will gain from lower risk aversion and the global equity play, supported by the weakening dollar. Country risk is low in Poland relatively to other CEE countries."
Joanna Pluta, TMS Brokers, Warsaw
"As negative factors disappeared, the Polish currency will be fully benefiting from better global sentiment and rising risk appetite."
Agata Urbanska, ING Bank, London
"On a 12-month horizon we continue to highlight that zloty is cheap but the short-term developments are uncertain and heightened volatility is likely to prevail."
ON FORINT
Balint Hada, Quaestor, Budapest
"Hungarian macroeconomic data show that we are far from a healthy and sustainable growth path."
Anette Skovgaard, Nordea, Copenhagen
"A weakening cannot be ruled out because the strengthening has happened very fast."
OTP Research Centre, Budapest
"We think the current HUF appreciation is not a fundamental process and the economy remains fragile this year."
ON CROWN:
Agata Urbanska, ING Bank, London
"The central bank did not deliver the expected cut in June but further easing remains likely, the more so the stronger the currency is. The balance of payments provides support to CZK appreciation in the medium to long-term.
ON LEU
Dagmar Hajkova, Generali PPF Asset Management
"In the near term we expect some pressure on the leu as IMF arrives in the end of July to reassess Romanian reforms and to decide on the next tranche of the IMF-led EUR 20 bln loan granted in March. Pressure might return in the fourth quarter when markets will experience new fears whether the full-year assumptions of IMF-led loan can be met and whather the economy really have got out of the bottom. During the first half of 2010 we expect recovery of risk appetite and a rebound of the leu."
(Reporting by Sandor Peto; Editing by Toby Chopra)
