PRAGUE, Oct 21 (Reuters) - Central Europe's currencies

retreated on Monday, with the forint dropping the most as it

snapped a two-day winning streak ahead of the Hungarian central

bank's meeting this week, where markets are counting on a pause

in interest rate cuts.

The Hungarian forint fell beyond the psychological

400-per-euro level this month, for the first time since March

2023, and has struggled to regain ground as global financial

markets have turned more risk averse and the U.S. dollar's

strength is weighing on central Europe's currencies.

Hungary's central bank is widely expected to keep its main

rate at 6.50% when it meets on Tuesday as recent

falls in the forint have raised fears of a rebound in price

growth.

The forint firmed past 400 last week after Deputy Central

Bank Governor Barnabas Virag said that the bank may pause its

rate cuts. But the move was short-lived.

"Virag managed to push it towards firming a bit last week,

but now the forint is going with the global flow," a Budapest

trader said.

"Tomorrow's rate decision, a hold, is already priced in, so

that will not really move the forint's rate. But if the bank

reiterates that it is willing to keep rates at this level, that

could help the forint firm past 400 again."

The forint had dropped 0.4% to 401.25 to the euro

by 0821 GMT.

In Poland, the zloty also fell, losing 0.35% to

4.319 to again edge down toward two-month lows beyond 4.32 hit

earlier in October. The Czech crown dipped 0.2% to

25.27 to the euro.

Currencies are facing pressure from a stronger dollar before

U.S. elections in two weeks, with polls showing rising odds of

former President Donald Trump winning.

"The Polish currency is influenced by global factors," Bank

Millennium said. "In addition to (incoming) data, market

sentiment will also be determined by (election) polls from the

United States."

Polish data on Monday gave no support to the zloty, with

industrial output falling in September and producer prices

decreasing more than expected. Unlike other central banks in the

region, Poland paused its rate cuts in the past year, lifting

the zloty versus its peers.

CEE SNAPSHOT AT

MARKETS 1021

CET

CURRENCIES

Latest Previo Daily Change

us

trade close change in 2024

Czech 0

Hungary 00

Polish Romania Serbian 00

Note: calcula 1800 CET

daily ted

change from

Latest Previo Daily Change

us

close change in 2024

Prague 1626.85 1627.3 -0.03% +15.05

400 %

Budapes 74525.81 74228. +0.40% +22.94

t 20 %

Warsaw 3

Buchare 17432.43 17405. +0.15% +13.41

st 74 %

Spread Daily

vs Bund change

in

Czech spread

Republi

c

0

Poland

FORWARD RATE

AGREEMENTS

3x6 6x9 9x12 3M

interba

nk

Czech Hungary Poland Note: are for

FRA ask

quotes prices

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