CEE MARKETS-FX slips as markets eye dollar, Hungarian rates

By Alan Charlish WARSAW, March 22 (Reuters) - Central European currencies were weaker on Friday as a strong dollar weighed on the region, with the Hungarian forint underperforming as traders nervously eyed an interest rate decision next week. Although the U.S. Federal Reserve's decision this week to stick to its projection of three rate cuts this year turned out to be more dovish than some had expected and sent the dollar falling, it quickly recouped the losses thanks to yet another run of resilient U.S. economic data. A stronger dollar is negative for emerging market currencies as it lowers the premium for holding riskier assets. In Hungary, the forint was 0.67% weaker against the euro at 397.35 as markets looked ahead to an interest rate decision on Tuesday where the cost of credit will fall. "Traders are closing their positions ahead of Hungary's central bank policy decision scheduled for next Tuesday," said a Budapest-based trader. In February, the cut its base rate by 100 basis points to 9%, ramping the pace of rate cuts. Estimates for next week's cut range from 50 to 100 basis points, and ING Economist Peter Virovacz said that nervousness that it could be at the upper end of this range could be weighing on the forint. "Maybe some players in the market are having some fears that the central bank will decide to continue with 100 (basis-point rate cut), and maybe that is causing the underperformance in the forint," he said. The Polish zloty was down 0.22% at 4.3175 while the Czech crown fell 0.18% to 25.3700. The Czech central bank cut its key interest rate by 50 basis points to 5.75% on Wednesday. The region's stock markets were mixed, with Prague's main index rising 0.86% while Budapest and Warsaw were down 0.26% and 0.19%, respectively. The Polish market was weighed down by shares in supermarket chain Dino Polska SA, which was down over 6% after its full-year profit missed analysts' estimates. CEE SNAPSHOT AT MARKETS 1052 CET CURRENCI ES Latest Previou Daily Change s bid close chang in 2024 e EURCZK= Czech 25.3700 25.3250 -0.18 -2.64% crown % EURHUF= Hungary 397.3500 394.700 -0.67 -3.56% forint 0 % EURPLN= Polish 4.3175 4.3080 -0.22 +0.63% zloty % EURRON= Romania 4.9730 4.9734 +0.0 +0.03% n leu 1% EURRSD= Serbian 117.1800 117.235 +0.0 +0.06% dinar 0 5% Note: calculated from 1800 daily CET change Latest Previou Daily Change s close chang in 2024 e .PX Prague 1495.85 1483.08 +0.8 +5.79% 00 6% .BUX Budapes 65671.71 65841.4 -0.26 +8.33% t 4 % .WIG20 Warsaw 2405.05 2409.74 -0.19 +2.65% % .BETI Buchare 16702.63 16601.8 +0.6 +8.66% st 5 1% Sprea Daily d vs change Bund in Czech spread Republi c CZ2YT=R bps CZ5YT=R bps CZ10YT= bps Poland PL2YT=R bps PL5YT=R bps PL10YT= bps FORWARD 3x6 6x9 9x12 3M interban k Czech < 4.78 3.94 3.33 5.86 Rep PRIBOR=> Hungary < 7.20 6.80 6.49 8.02 BUBOR=> Poland < 5.90 5.82 5.58 5.86 WIBOR=> Note: are for ask prices FRA quotes ******************************************** ****************** (Reporting by Alan Charlish in Warsaw and Boldizsar Gyori in Budapest; Editing by Tasim Zahid)