WARSAW, Oct 2 (Reuters) - The Hungarian forint fell to

its weakest against the euro in 6-1/2 months on Wednesday, while

the Czech crown hit a new eight-week low and the zloty eased

before a Polish rate decision.

Falling interest rates in Hungary and the Czech Republic

have put pressure on those countries' currencies, while the

zloty has been supported as the Polish central bank paused rate

cuts for the past year.

The zloty is still within sight of multi-year highs hit

earlier this year.

Economists polled by Reuters expect the National Bank of

Poland to extend that pause and maintain its base interest rate

at 5.75% on Wednesday, as inflation rebounds above target.

By 0935 GMT the zloty was down 0.1% against the

euro at 4.296, nearing the psychological 4.30 level it has

remained below since mid-September.

A Warsaw-based trader said the zloty would likely breach the

that level on Wednesday as escalation of the conflict in the

Middle East this week weighed on currencies.

"A stronger dollar, higher oil prices - this also has an

impact on the currencies of emerging markets, including the

zloty," the trader said.

"All this is happening against the backdrop of the (Polish)

monetary policy council, (U.S.) payrolls on Friday, but I think

this global factor is dominant at the moment," the trader said,

referring to the escalation in the Middle East conflict.

The dollar held onto its biggest gains in a week on

Wednesday after an Iranian missile attack on Israel.

In Hungary, the forint lost 0.3% to 399.25 per

euro and touched its lowest level since mid-March.

"The FX market has fully switched into risk-off mode," ING

said in a note.

ING said a growing divergence between central and eastern

European currencies and the region's interest rates market will

have to be closed at some point, allowing for the currencies'

weakness to fade.

"The Polish zloty seems most appealing with the central bank

meeting this week, while the Czech koruna may be attractive

later," ING said. "The Hungarian forint, on the other hand, will

have the hardest path to finding stable ground within the CEE

peers."

The Czech crown was 0.2% lower to the euro at

25.33 to the euro, sitting around lows from early August.

CEE SNAPSHOT AT

MARKETS 1135

CET

CURRENCIES

Latest Previo Daily Change

us

trade close change in 2024

Czech 0

Hungary 00

Polish Romania Serbian 00

Note: calculated from 1800 CET

daily

change

Latest Previo Daily Change

us

close change in 2024

Prague 1597.65 1604.5 -0.43% +12.99

300 %

Budapes 74324.54 74189. +0.18% +22.61

t 72 %

Warsaw 6

Buchare 17495.20 17568. -0.42% +13.82

st 14 %

Spread Daily

vs Bund change

in

Czech spread

Republi

c

Poland

0

FORWARD RATE

AGREEMENTS

3x6 6x9 9x12 3M

interba

nk

Czech Hungary Poland Note: are for ask prices

FRA

quotes

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