By Sandor Peto
BUDAPEST, Oct 6 (Reuters) - Central European currencies are
seen posting minor gains against the euro in the next months,
while the Polish zloty is seen surging about 8 percent over 12
months, a Reuters poll of analysts showed on Tuesday.
According to the poll of 46 analysts, conducted on Oct 1-6,
forecasts for the region's main currencies in the next 12 months
showed slightly stronger levels than one month ago, despite some
market jitters in the past weeks.
The Czech crown<EURCZK=>, the Polish zloty<EURPLN=> and
Hungary's forint<EURHUF=> have firmed 16-19 percent to the euro
since hitting lows early this year on concerns over the region's
financial stability amid the global crisis.
Exchange rates are coming into focus again as investors
assess risks to the global recovery and domestic uncertainties
in the high-yielding Central European region over its growth
outlook, budgets and politics.
International Monetary Fund Director Marek Belka has warned
that investors increasingly differentiate between assets in the
region and governments need further measures to guarantee fiscal
discipline or the recovery will pass them by.[]
ZLOTY REMAINS FAVOURITE
The zloty was seen by analysts in the poll as the clear
winner in the differentiation game. They saw it retreating to
4.2 per euro by end-October from around 4.18 on Tuesday, but
surging to 3.9 in 12 months, a forecast unchanged from last
month.
"It's more difficult to forecast for the short- and the
medium-term as the zloty has been quite volatile and there are
significant uncertainties in the short term like the state
budget," said Zsolt Papp of KBC in London. "But growth prospects
in Poland are more stable than elsewhere in the region."
While Poland is the only country in the region which has
avoided deep recession, the zloty is also buoyed by the
expectation that its central bank is unlikely to cut rates.
Hungary's bank (NBH) is seen continuing to slash rates to
around 5.75 percent by next year from 7.5 percent now, while
the Czech central bank said the crown had firmed too much and it
might further cut its 1.25 percent main rate.[]
Analysts expect the crown to firm slightly to 25.5 from
Tuesday's 25.58 by the end of this month, to 25.25 in six months
and 25 in 12 months.
Those forecasts are a shade firmer than one month ago. The
12-month forecast for the Hungarian forint improved, however,
to 266 per euro from 272 a month ago.
Before strengthening, the currency is expected to retreat to
273.15 in the next six months, when the NBH is seen cutting
interest rates, from Tuesday's levels around 267.
"Hungary has had a massive foreign trade surplus which helps
stabilize the exchange rate," said Orsolya Nyeste of Erste Bank.
"This is the key factor, I don't think that elections next
spring could have a big impact on the forint."
The leu<EURRON=>, the most stable currency in the region
this year, is expected to trade close to current levels at 4.26
in the next three months, but to firm to 4.1 by September 2010,
after Romania leaves behind its current political turmoil.
RISKS REMAIN
While the Czech central bank is worried a strong crown can
deepen recession, a 19.9 percent fall in Hungary's industrial
output in August was also a reminder of the risks that domestic
economic trends can pose to the currency. []
The median forecasts in the poll show little exchange rate
movement in the region in the next months, and many analysts
believe an improvement in risk appetite in the world in the past
months could continue to lend support to the currencies.
The individual forecasts stayed in wide ranges as some
investors still expect a deterioration in global market
sentiment, some for the end of this year, others for next year.
Danske Bank last month introduced "scorecards" for the
region's currencies in its reports to help investors find their
way among a multitude of economic, carry, technical and other
domestic factors to differentiate between the region's assets.
"Our EMEA FX scorecard continues to send the most bullish
signals for the zloty," Danske said in a note dated October 2.
The long-term valuation of the zloty looks particularly
attractive and we therefore see value in being long in the zloty
versus other currencies in the region."
For data please click on <CEEFXPOLL01>
To see latest poll on major currencies, please see
<FOREXPOLL01>
For more analyst comments on CEE currencies please click on
[]
(Reporting by Sandor Peto)
