* Zloty to gain 4 pct in one yr, crown and leu about 1 pct
* Forint seen weaker in 12 months after recent surge
* Zloty, crown fcasts slightly firmer than month ago
* Forint, leu 12-month fcasts weaker than month ago
By Sandor Peto
BUDAPEST, Oct 6 (Reuters) - Central European currencies are
expected to firm further in the next 12 months, led by the
zloty, but the forint may retreat after a surge in recent weeks,
a monthly Reuters poll of analysts showed on Wednesday.
Median forecasts in the Oct 4-5 poll of 30 analysts showed
the zloty <EURPLN=> could firm 4.4 percent against the euro from
Tuesday's close in the next 12 months -- rising to 3.78 compared
with a 3.82 forecast a month ago.
The leu<EURRON=> and the Czech crown are expected to firm
1.4 and 0.9 pct, respectively, while the Hungarian forint
<EURHUF=> is seen weakening by 2.4 percent.
The leu's projected level at 4.22 against the euro is weaker
than last month's 4.1 forecast, while the consensus for the
forint weakened to 276 from 271.50.
This reflects their status as more vulnerable economies than
elsewhere in the region and continuing concerns over the
government's fragility in Romania, analysts said.
They said uncertainty about global growth and western
European markets for goods produced in the region's emerging
economies' maintained exchange rate risks.
But the prospect of new quantitative easing in the United
States is likely to keep flows to emerging market assets flowing
as investors search for higher yields than the ultra-low returns
being offered further West.
"Interest rates of developed economies can remain low for a
longer period of time and accommodative monetary policies may
support all currencies in our region in the forthcoming months," said Balint Hada of Quaestor Financial Consulting in Budapest.
BUDGET RISKS
Analysts were split over the prospects of the forint which
traded near 5-month highs on Wednesday after a 7 percent surge
since the government's announcement a month ago that it would
cut the budget deficit to below 3 percent of gross domestic
product (GDP) next year to meet the EU's requirements.
Analysts said the details of the 2011 budget to be published
in coming weeks would be key for Hungarian assets, but most of
them expected the forint to retreat already in the short term.
The consensus for its end-October level was 275, compared
with Wednesday's trade around the key 270 technical level.
"Currently, on the shorter run, some correction can come in
the forint (technically it is also rather overbought) but if the
dollar weakens further, the forint can remain strong," said
Zoltan Arokszallasi of Erste Bank in Budapest.
The median forecast of 276 in the 12-month horizon showed
weaker forint levels than a month ago, but the individual
projections showed that views were mixed, with many forecasts
centering around 263 and many others around 280.
Wolfgang Ernst of Raiffeisen Research in Vienna said he
expected global economic slowdown, a rise in risk aversion and a
retreat by the region's currencies by the end of the year.
"The forint is from a fundamental point of view more
vulnerable than other currencies in the region, while the zloty
(the most liquid currency in the region) from a liquidity point
of view," he said.
Most analysts, however, see the zloty firming gradually in
the next 12 months, even though some analysts expect it to
retreat in the next weeks along with the region's other units.
"(We expect) further zloty appreciation taking into account
(that the) zloty is still undervalued after its 2008/2009 strong
depreciation, while (Poland has) strong macroeconomic
fundamentals," said Janina Swiatkowska of PKO BP in Warsaw.
For data please click on <CEEFXPOLL01>
Poll on major currencies []
(Reporting by Sandor Peto; editing by Patrick Graham)
