* Zloty steadies; markets still see Polish rate hike soon
* Leu unfazed by cbank comments
PRAGUE, Jan 14 (Reuters) - Central European currencies held
steady in early trade on Friday, with the zloty stabilising
after profit-taking in the previous session as markets continued
to bet on a near-term Polish rate hike.
A majority of analysts have forecast Poland's central bank
will start tightening monetary policy next week, a view that was
kept intact Thursday by a rise in December inflation data.
[] []
"With Governor Belka now likely having joined that camp a
first hike is likely at next Wednesday's meeting," SEB said.
"This is fully priced in the market implying that the risk
lies in an on-hold decision, which would trigger profit-taking
it the zloty after recent gains."
The zloty has gained 2 percent this year but was trading off
a nine-month high hit earlier in the week after profit-taking on
Thursday. On Friday, it bid <EURPLN=> at 3.877 to the euro by
0900 GMT, down 0.15 percent on the day.
The Hungarian forint, which gained on Thursday thanks to
profit-taking on the zloty/forint cross, lost 0.25 percent to
hover around the 275 per euro resistance level. []
The Czech crown <EURCZK=> inched up 0.2 percent, while the
Romanian leu <EURRON=> was steady, unaffected by comments by
central bank governor Mugur Isarescu about possible rate cuts.
ROMANIA RATE CUTS COMING
Isarescu said in a broadcast interview late on Thursday that
the central bank would cut interest rates from the current 6.25
percent when projected levels of inflation start falling.
[]
Yearly inflation rose sharply to hit 8 percent in December
after a 5 percentage point value added tax hike in July, which
interrupted a 400 basis points rate easing cycle that the
central bank started in August 2008. []
Markets expect Romania to cut rates this year to help it out
of recession, while Hungary, Poland and possibly the Czech
Republic are expected to continue or begin rate hikes.
Hungary became the first country in central Europe to start
tightening policy in November, citing inflation risks.
Data on Friday showed the Hungary's headline inflation rate
accelerated to 4.7 percent in December. Analysts said the data
would boost rate hike expectations, but that risk appetite would
also play a factor in the bank's decision. []
"The jump (in headline CPI) to 4.7 percent will boost rate
hike expectations," said Gergely Suppan, analyst with
Takarekbank.
"The reasons that supported the rate increase in December
are still there. So it would be a surprise if the central bank
decided to hold interest rates this month."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.382 24.422 +0.16% +2.53%
Polish zloty <EURPLN=> 3.877 3.871 -0.15% +2.09%
Hungarian forint <EURHUF=> 275.55 274.85 -0.25% +0.88%
Croatian kuna <EURHRK=> 7.396 7.397 +0.01% -0.22%
Romanian leu <EURRON=> 4.263 4.26 -0.07% -0.7%
Serbian dinar <EURRSD=> 105.06 104.78 -0.27% +0.83%
All data taken from Reuters at 1003 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by John Stonestreet)
