July 2 (Reuters) - Central European currencies are expected
to retreat in the next months after the past weeks' strong
gains, but are set to firm in the next 12 months, a Reuters poll
of analysts showed on Thursday.
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ON REGION
Radomir Jac, Generali PPF Asset Management, Prague
"Most currencies in the Central European region firmed more
than expected in the past weeks, particularly the forint and
Czech crown. We think that particularly the forint may correct
its recent gains in weeks to come: last but not least because
the NBH (central bank) is likely to restart its monetary policy
easing cycle in the summer months...In a medium-term perspective
the strategic view remains positive, as we believe the region's
currencies will benefit from gradually improving global economic
picture, which should be supportive to appetite for riskier
assets, including the Central and Southest European currencies."
Balint Hada, Quaestor, Budapest
"Thanks to (financing from) the World Bank, IMF and the
European Union, the countries of Eastern Europe received massive
financial support that reinforced investors' confidence in our
region but the financial situation is still fragile and trading
is still based on sentiment."
Maja Goettig, Bank BPH, Warsaw
"The key mid-term risk factor for the zloty is the potential
deep correction of the recent global markets rally driven by
excessive optimism over the pace of the global economic
recovery. Another risk factor is renewed concern over
devaluation in Latvia if it turns out IMF and EU support is not
enough, which would negatively weigh on CEE currencies including
the zloty."
ON ZLOTY
Maja Goettig, Bank BPH, Warsaw
"The expiration of currency options, which visibly weighed
on the zloty in the past months, should fade towards the end of
this year."
Radoslaw Cholewinski, Noble Bank, Warsaw
"The zloty will gain from lower risk aversion and the global
equity play, supported by the weakening dollar. Country risk is
low in Poland relatively to other CEE countries."
Joanna Pluta, TMS Brokers, Warsaw
"As negative factors disappeared, the Polish currency will
be fully benefiting from better global sentiment and rising risk
appetite."
Agata Urbanska, ING Bank, London
"On a 12-month horizon we continue to highlight that zloty
is cheap but the short-term developments are uncertain and
heightened volatility is likely to prevail."
ON FORINT
Balint Hada, Quaestor, Budapest
"Hungarian macroeconomic data show that we are far from a
healthy and sustainable growth path."
Anette Skovgaard, Nordea, Copenhagen
"A weakening cannot be ruled out because the strengthening
has happened very fast."
OTP Research Centre, Budapest
"We think the current HUF appreciation is not a fundamental
process and the economy remains fragile this year."
ON CROWN:
Agata Urbanska, ING Bank, London
"The central bank did not deliver the expected cut in June
but further easing remains likely, the more so the stronger the
currency is. The balance of payments provides support to CZK
appreciation in the medium to long-term.
ON LEU
Dagmar Hajkova, Generali PPF Asset Management
"In the near term we expect some pressure on the leu as IMF
arrives in the end of July to reassess Romanian reforms and to
decide on the next tranche of the IMF-led EUR 20 bln loan
granted in March. Pressure might return in the fourth quarter
when markets will experience new fears whether the full-year
assumptions of IMF-led loan can be met and whather the economy
really have got out of the bottom. During the first half of 2010
we expect recovery of risk appetite and a rebound of the leu."
(Reporting by Sandor Peto; Editing by Toby Chopra)
