* CEE currencies seen firming after falls in past week
* Zloty seen best performer
By Sandor Peto
BUDAPEST, Sept 2 (Reuters) - Central Europe's main
currencies are expected to regain some ground in the next months
after a retreat and return to their earlier firming path by
2010, a Reuters poll of analysts showed on Wednesday.
The monthly poll of 38 analysts, conducted between Aug 28
and Sept 2 confirmed that analysts expect Poland's zloty
<EURPLN=> to strongly outperform its regional peers against the
euro in the next 12 months.
Forecasts for the crown<EURCZK=> show stronger levels than
one month ago despite a Czech Constitutional Court ruling on
Tuesday which may delay elections earlier planned for October.
The forint<EURHUF=>, however, is expected to remain slightly
weaker over the next 12 months than earlier expected as the
Hungarian central bank (NBH) has cut interest rates twice in the
past two months and is seen further easing policy.
The crown, the zloty and the forint have firmed 15-18
percent from lows early this year as sentiment in global markets
has improved in the past months. Romania's leu<EURRON=>, the
most stable unit in the region, has strengthened three percent.
A retreat of risky assets in the past weeks trimmed the
gains, but analysts said the reversal would be temporary as the
region's Western European export markets were showing signs of
recovery from the global crisis.
ZLOTY SEEN OUTPERFORMING
Most of the region's economies are grappling with deep
recession, all of them need fiscal restraint to rein in budget
deficits and central banks have cut interest rates deeply,
exploiting their currencies' recovery in the past months.
Global risk appetite will remain the key driver of currency
movements in the region, but investors will prefer the units of
sounder economies, analysts said.
Poland, which has the biggest internal market in the region,
has avoided recession, and according to the median forecasts in
the poll its currency will be stronger in the next months than
earlier expected, and outperform regional peers.
The zloty is seen firming to 4.05 per euro by February from
levels around 4.16 on Wednesday, compared to a 4.1 percent
forecast one month ago. In 12 months it is seen firming about
seven percent to 3.9, unchanged from the previous forecast.
"Higher than expected GDP in Q2 in Poland (up 1.1 percent
year-on-year) suggests that the equilibrium exchange rate of the
zloty may be slightly higher than previously expected," said
Jakub Borowski of Invest-Bank in Warsaw.
The crown is expected to firm to 25.6 per euro by the end of
this month from around 25.65, a stronger level than 25.93
projected last month, despite uncertainty over the date of
upcoming Czech parliamentary elections.[]
"Germany is returning to growth which is good for Czech
exports... the prospects of the Czech economy have improved and
that's more important now than the political situation," said
Zsolt Papp, analyst of KBC in London.
For the 12-month horizon, the median forecast, however,
eased to 25.1 for the crown from 24.99.
The prospects for the forint<EURHUF=>, which traded around
276 per euro on Wednesday, have deteriorated as the NBH has
reduced its base rate by 1.5 percentage points to 8 percent
since July and further cuts are expected, analysts said.
"Also the government is forced to maintain tight fiscal
policy which means the outlook of domestic demand is worse than
for example in Poland," said Papp.
The forint is seen trading around 275 at the end of this
month, compared with 270 projected one month ago, while the
12-month forecast changed to 272 from 266.
Romania's leu is expected to ease further to 4.29 against
the euro in the next three months from Wednesday's 4.236,
compared with last month's 4.21 forecast, but by September next
year it is seen firming to 4.15 per euro.
For data please click on <CEEFXPOLL01>
For more analyst comments on CEE currencies []
For TAKE A LOOK-Reuters September foreign exchange poll
[]
(Reporting by Sandor Peto; editing by Stephen Nisbet)
