(Corrects timing of central bank governor statement to a month

earlier in paragraph 3)

WARSAW, July 16 (Reuters) - The zloty came under

pressure on Tuesday, pulling back from the multi-year highs it

approached in recent days, as steady interest rates amid policy

easing elsewhere continue to prop up the Polish currency.

In early July, Poland's central bank governor said

interest-rate cuts would not happen before 2026, as inflation

was expected to accelerate.

In July the central bank kept interest rates on hold for the

ninth month in a row. A month earlier, the governor had

signalled the possibility of easing from mid-2025.

By 0947 GMT the Polish zloty had shed 0.4% against

the euro, trading at 4.2670.

It had pulled back from the 4.2480 level it touched on

Monday, before retreating, for the second time in the span of

less than a week, a hair off of the more than four-year high of

4.2470 hit in late May.

A Warsaw-based trader said the zloty was under "light

pressure" today, attributing it to some risk off sentiment

hitting emerging market assets, but called 4.25 a "good" support

level.

"Yesterday again saw attempts to bring the euro below 4.25

zlotys. They weren't as successful, probably due to the lack of

strong impulses from core markets and calm trade in the region,"

state-owned development bank BGK said in a note.

"We believe that events on global markets - including the

steepening of the U.S. curve - may currently make strengthening

the zloty more difficult. As a result, today we expect calm

trading on the zloty in the range of 4.25-4.27 zlotys per euro."

The Hungarian forint traded 0.1% lower at 391.75

per euro, largely holding onto gains from the previous sessions.

"I attribute the strengthening of the forint that started on

Friday to global factors," a Budapest-based trader said.

"It is a calm summer trading day, though, with the forint

trading in a tight range between 390.50 and 392. Retail sales

data from the U.S. in the afternoon could move the market a

bit."

Bets for a rate cut by the U.S. Federal Reserve in September

also helped the forint, according to the trader.

Fed chair Jerome Powell said on Monday the three U.S.

inflation readings over the second quarter of this year "add

somewhat to confidence" that the pace of price increases is

returning to the Fed's target in a sustainable fashion, remarks

that suggest a turn to interest rate cuts may not be far off.

National Bank of Hungary (NBH) rate-setters, who have cut

borrowing costs by 1,100 basis points since May 2023, are

scheduled to meet next week, with deputy governor Barnabas Virag

saying on Monday that possible further small reduction in the

base rate is an "open question".

The Czech crown gained 0.1% and traded at 25.3630

per euro, edging away from 3-month lows after

lower-than-expected inflation data last week, which increased

bets on more interest rate cuts ahead.

CEE SNAPSHOT AT

MARKETS 1147 CET

CURRENCI

ES

Latest Previous Daily Change

trade close change in 2024

Czech 25.3630 25.3985 +0.14% -2.61%

crown

Hungary 391.7500 391.3800 -0.09% -2.19%

forint

Polish 4.2670 4.2521 -0.35% +1.82%

zloty

Romanian 4.9651 4.9685 +0.07% +0.19%

leu

Serbian 117.0000 117.0200 +0.02% +0.21%

dinar

Note: calculated from 1800 CET

daily

change

Latest Previous Daily Change

close change in 2024

Prague 1599.99 1600.230 -0.01% +13.15%

0

Budapest 72400.98 72730.44 -0.45% +19.43%

Warsaw 2521.67 2569.86 -1.88% +7.63%

Bucharest 18584.96 18546.14 +0.21% +20.91%

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 Hungary Poland Note: FRA are for ask prices

quotes

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