WARSAW, May 28 (Reuters) - Central Europe's currencies

held steady on Tuesday, with the zloty near a multi-year high

ahead of an inflation reading later in the week, and the Czech

crown and Hungarian forint slightly off of their highest levels

in months.

"Conditions for emerging market currencies remain

favourable, with continued risk-on sentiment and a weaker U.S.

dollar," ING analysts wrote in a note, pointing out the rather

light calendar for Central Europe.

"Despite the fact that we still see most of the region's

currencies overvalued on a short-term basis, the coming days

will likely support further CEE FX gains across the board."

By 0846 GMT the Polish zloty traded at 4.2590 per

euro, after hitting 4.50 last week, its strongest level since

February 2020.

The zloty remains the region's top performer this year,

supported by the Poland's stable rates outlook from the central

bank and incoming European Union funds.

"Although the EUR/PLN exchange rate is trying to break the

level of 4.25, that is the minimum from 2020, it has not been

able to break it successfully so far. At the same time failures

in the zloty's strengthening did not generate a lasting

corrective impulse," Bank Millennium analysts wrote in a note.

They said that while a shallow breach of 4.25 was possible,

they expected the currency to stabilise around this level in the

coming days.

Poland's stats office will release its flash consumer

inflation reading for May on Wednesday.

"The thing is that we do not believe that the Polish CPI

reading will change the outlook for NBP interest rates, and thus

the valuation of the zloty," Bank Millennium analysts added.

The Hungarian forint traded at 384.50 per euro,

slightly off of its almost four-month high of 383.70 hit on

Friday.

Last week, Hungary's central bank cut its base rate in line

with expectations and said that scope for more easing would be

"very very limited" amid strong service sector repricing and

other risks.

The Czech crown was at 24.7010 per euro, off the

4-1/2 month high of 24.6050 it opened at on Monday, before

easing.

In early May, the Czech central bank also cut its base rate

as expected but scaled back the scope for further easing in an

economic outlook showing stronger growth and softer inflation

this year.

CEE MARKETS SNAPSHOT AT 1046 CET

CURRENCIES

Latest Previous Daily Change

bid close change in 2024

Czech 24.7010 24.6910 -0.04% +0.00%

crown

Hungary 384.5000 384.3500 -0.04% -0.34%

forint

Polish 4.2590 4.2580 -0.02% +2.01%

zloty

Romanian 4.9765 4.9763 -0.00% -0.04%

leu

Note: calculated from 1800

daily CET

change

Latest Previous Daily Change

close change in 2024

Prague 1548.14 1557.1700 -0.58% +9.49%

Budapest 69749.88 65125.52 +7.10% +15.06

%

Warsaw 2522.64 2508.34 +0.57% +7.67%

Bucharest 17859.27 16879.46 +5.80% +16.19

%

Spread Daily

vs Bund change

in

Czech spread

Republic

2-year 4.1250 0.0120 +109bp +2bps

s

5-year 4.1990 0.0100 +159bp +1bps

s

10-year 4.3580 0.0030 +182bp +1bps

s

Poland

2-year 5.3650 0.0030 +233bp +1bps

s

5-year 5.7040 0.0140 +310bp +2bps

s

10-year 5.8250 0.0110 +329bp +2bps

s

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