Last checked at 
BUDAPEST, Jan 23 (Reuters) - Hungary's forint eased on Monday after ratings agency Fitch on Friday revised its outlook on Hungary's debt rating to negative from stable, while a weaker dollar and lower gas prices continued to support the region's currencies.
Investors were cautious ahead of the National Bank of Hungary's (NBH) first monthly rate meeting this year, due on Tuesday. The central bank is expected to keep its main rates on hold as it is still facing upside inflation risks. Inflation was running at an annual 24.5% in December.
However, after the forint's gains this year, market players will be eyeing any hints of policy normalisation going forward after a string of rate increases last year, including an emergency move in October to launch a daily deposit at an 18% rate to shore up the currency. Hungary has the European Union's highest interest rates.
At 0810 GMT, the forint was 0.11% weaker against the euro at 393.85 and by 0851 GMT it extended losses to 395.20. However, it was still stronger than its levels of around 400 at the end of 2022.
"While we do not expect any change in the level of interest rates, we believe that the central bank may begin preparation for the normalisation of rates," analysts at Erste said in a research note.
"We believe that the Czech National Bank is most likely to be the first to begin with monetary easing in the second half of the year."
While the forint has gained this year as the mood in global markets improved, a peak in inflation is still hard to predict and Hungary has still not managed to unblock EU funding, which was suspended amid a rule of law dispute with Brussels. Fitch said it expected a high probability of delays in the disbursement of EU funds to Hungary.
A Reuters poll published on Friday predicted the NBH would leave its base rate unchanged at 13% on Tuesday.
ING analysts said they expected "the hawkish NBH to dampen the current market speculation on an early rate cut, which should be positive for the forint."
Elsewhere, ING said the Czech crown would likely remain near 24.00 to the euro and the Polish zloty could firm below 4.70 versus the euro. On Monday the crown was steady at 23.898. The zloty eased 0.08%.
Bank Millenium analysts said that due to uncertainty over the unblocking of EU funds for Poland, "the zloty - despite the rising eurodollar - remains under moderate pressure from
sellers."
CEE SNAPSHO AT
MARKETS T 0918
CET
CURRENC
IES
Latest Previou Daily Change
s
bid close change in 2023EURCZK Czech <EURCZK 23.8980 23.9100 +0.05% +1.09% = crown =>
EURHUF Hungary <EURHUF 393.850 393.400 -0.11% +1.42%
= forint => 0 0EURPLN Polish <EURPLN 4.7140 4.7100 -0.08% -0.52% = zloty =>
EURRON Romanian <EURRON 4.9222 4.9213 -0.02% +0.41%
= leu =>
EURHRK Croatian <EURHRK 7.5330 7.5365 +0.05% +0.05%
= kuna =>
EURRSD Serbian <EURRSD 117.300 117.375 +0.06% +0.00%
= dinar => 0 0
Note: calculated from 1800
daily CET
change
Latest Previou Daily Change
s
close change in 2023
.PX Prague 1290.29 1280.54 +0.76% +7.37%
00
.BUX Budapest 46585.5 46440.1 +0.31% +6.37%
0 4.WIG20 Warsaw <.WIG20 1906.97 1892.32 +0.77% +6.42% >
.BETI Buchares 12130.7 12075.7 +0.46% +4.01%
t 1 2
.SBITO Ljubljan <.SBITO 1114.28 1114.35 -0.01% +6.24%
P a P>.CRBEX Zagreb <.CRBEX 2068.85 2068.85 +0.00% +687.3 > 2%
.BELEX Belgrade <.BELEX 833.56 833.56 +0.00% +1.09%
15 15>.SOFIX Sofia <.SOFIX 617.74 617.74 +0.00% +2.70% >
Yield Yield Spread Daily
(bid) change vs Bund change
in
Czech spread
RepublicCZ2YT= 2-year <CZ2YT= 5.6640 -0.1590 +308bp -16bps RR RR> s
CZ5YT= 5-year <CZ5YT= 4.8280 -0.0410 +262bp -4bps RR RR> s
CZ10YT <CZ10YT 4.3080 -0.0150 +214bp -1bps
=RR 10-year =RR> s
PolandPL2YT= 2-year <PL2YT= 5.9950 -0.0830 +341bp -9bps RR RR> s
PL5YT= 5-year <PL5YT= 5.9300 0.0030 +372bp +0bps RR RR> s
PL10YT <PL10YT 5.9890 0.0010 +382bp +1bps
=RR 10-year =RR> s
FORWARD
3x6 6x9 9x12 3M
interba
nk
Czech <CZKFRA 7.10 6.80 6.26 7.21
Rep ><PRIBO
R=>
Hungary <HUFFRA 14.17 12.82 10.97 16.00
><BUBOR
=>
Poland <PLNFRA 6.93 6.86 6.40 6.92
><WIBOR
=>
Note: are for ask
FRA prices
quotes
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