WARSAW, Sept 26 (Reuters) - The forint eased to a

two-week low on Thursday following the latest Hungarian interest

rate cut, while the crown also drifted weaker following further

Czech policy easing.

Hungarian rate-setters resumed monetary policy easing after

a one-month pause on Tuesday. A day later, the Czech National

Bank delivered its own 25-basis-point interest rate cut,

extending an easing cycle in place since December.

The reductions followed last week's larger-than-usual cut by

the U.S. Federal Reserve.

Hungary's central bank, which has cut borrowing costs by a

combined 1,150 bps since May 2023, sounded a cautious note on

further steps this week, and on Thursday it upped its

tax-adjusted core inflation projections due to the government's

deficit-fighting tax hikes next year.

The forint, though, continued to slip on Thursday,

losing 0.3% to trade at 396.50 to the euro, the weaker end of a

range it has recently traded in.

A dealer said dollar moves, following overnight

strengthening for the U.S. currency, had prompted some

profit-taking amid muted activity.

Markets have started taking more cues from external factors,

like the outlook for just-started easing cycles by major central

banks such as the European Central Bank and U.S. Fed.

The crown touched a one-week low on Thursday and

was trading at 25.16 per euro, after slipping on Wednesday

following the Czech rate cut.

Bank CSOB analysts said a less hawkish tone weighed. "At the

same time, risk aversion in global markets rose," they said.

The Czech central bank is also taking a cautious approach to

further policy steps. Many analysts, though, expect

quarter-point rate cuts at the final two meetings this year, in

November and December.

Market rates were mostly unmoved after the Czech central

bank meeting, and still price in another 75 bps in cuts in the

next six months.

In Poland, the zloty edged 0.1% lower to 4.2730

per euro, pulling further away from two-month highs hit earlier

this week.

"The behavior of the zloty in the second half of the week

should be linked to the situation on EURUSD. Investors are

generally ignoring events other than U.S. data," Bank ING BSK

analysts wrote in a note.

"For now, the risk of the dollar weakening again remains

high, which suggests significant chances for EURPLN to return

closer to this year's lows (around 4.25)," they added.

Poland's central bank has held steady on rates since a few

initial cuts last year. In comments published on Wednesday by

Money.pl website, central banker Iwona Duda said discussion

about rate cuts could start in March at the earliest.

The National Bank of Poland is expected to publish its

monetary policy assumptions for 2025, while rate setters will

hold their decision meeting next week.

CEE SNAPSHOT AT

MARKETS 1210 CET

CURRENCI

ES

Latest Previous Daily Change

trade close change in 2024

Czech Hungary Polish Romanian Serbian Note: calculated from 1800 CET

daily

change

Latest Previous Daily Change

close change in 2024

Prague 1599.20 1590.000 +0.58% +13.10%

0

Budapest 74801.05 74378.07 +0.57% +23.39%

Warsaw 2365.39 2346.26 +0.82% +0.96%

Bucharest 17646.51 17690.32 -0.25% +14.80%

Spread Daily

vs Bund change

in

Czech spread

Republic

2-year 5-year 10-year Poland

2-year 5-year 10-year FORWARD

3x6 6x9 9x12 3M

interban

k

Czech Rep 3.71 3.42 3.11 4.27

Hungary 5.88 5.94 5.45 6.34

Poland 5.75 5.35 4.68 5.86

Note: FRA are for ask prices

quotes

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