* Currencies fall, led by zloty and forint
* Hungary seen cutting rates 50 bps
By Marius Zaharia
BUCHAREST, Sept 28 (Reuters) - The Polish zloty led losses
in Central Europe on Monday on the back of a fall in stocks
globally, and it was followed by the forint in Hungary, where
the central bank is expected to cut rates by 50 basis points.
Hungary is seen easing rates to 7.5 percent on Monday by
most analysts. It would be a third reduction in a row to fight a
painful recession [], which was highlighted by
unemployment data earlier in the day [].
The June-August 9.9 percent figure matched its highest on
record during the current crisis, and the highest since the
third quarter of 1996.
The forint <EURHUF=> traded at 270.07 per euro at 0728 GMT,
0.4 percent down from the previous domestic close.
"Given the dovish central bank (NBH) outlook we keep our
cautious stance on HUF as we continue to think that stronger
appreciation pressure would lead to stronger rate cuts and the
NBH still prefers a range of 265-280," UniCredit said in a note.
It also said a "dovish outcome" should also help bonds,
particularly short-term ones, to extend last week's gains.
Romania is seen performing a similar move this week
[], while Poland is seen holding fire [].
In Poland, the zloty <EURPLN=> hit a fresh two-week low
following stock losses globally. Analysts also said fiscal woes
as well as a possible dividend payout from state insurer PZU,
which could be exchanged into euro, weigh on the unit.
The Czech crown <EURCZK=> edged down as domestic markets
were closed for a holiday. On Friday, investors were relieved to
see the Czech parliament approving an austerity plan for next
year, removing the risk of a government collapse [].
In Romania, the leu <EURRON=> was still hovering around the
key 4.2 per euro level, to which it firmed gradually last week
on the back of the International Monetary Fund approval of a
second loan tranche.
But a ballooning budget deficit, expected rate cuts and
political risks ahead of a presidential election in November
will prevent sharp gains for the currency, dealers said.
On Friday, data showed the budget deficit rose to 4.5
percent of GDP in the first eight months, widening by one
percentage point in a month [].
Markets were also waiting for comments from policymakers,
bankers and corporate officials on the strength of a recovery in
the region at the Reuters Central and Eastern European
investment Summit from Sept. 28-30 [].
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.197 25.148 -0.19% +6.18%
Polish zloty <EURPLN=> 4.232 4.2 -0.76% -2.76%
Hungarian forint <EURHUF=> 270.07 268.91 -0.43% -2.41%
Croatian kuna <EURHRK=> 7.284 7.267 -0.23% +1.11%
Romanian leu <EURRON=> 4.212 4.196 -0.38% -4.69%
Serbian dinar <EURRSD=> 92.487 92.71 +0.24% -3.25%
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(Reporting by Reuters bureaus, writing by Marius Zaharia
Editing by Andy Bruce)
