By Sandor Peto
BUDAPEST, Oct 6 (Reuters) - Central European currencies are seen posting minor gains against the euro in the next months, while the Polish zloty is seen surging about 8 percent over 12 months, a Reuters poll of analysts showed on Tuesday.
According to the poll of 46 analysts, conducted on Oct 1-6, forecasts for the region's main currencies in the next 12 months showed slightly stronger levels than one month ago, despite some market jitters in the past weeks.
The Czech crown
Exchange rates are coming into focus again as investors assess risks to the global recovery and domestic uncertainties in the high-yielding Central European region over its growth outlook, budgets and politics.
International Monetary Fund Director Marek Belka has warned that investors increasingly differentiate between assets in the region and governments need further measures to guarantee fiscal discipline or the recovery will pass them by.[ID:nL522524]
ZLOTY REMAINS FAVOURITE
The zloty was seen by analysts in the poll as the clear winner in the differentiation game. They saw it retreating to 4.2 per euro by end-October from around 4.18 on Tuesday, but surging to 3.9 in 12 months, a forecast unchanged from last month.
"It's more difficult to forecast for the short- and the medium-term as the zloty has been quite volatile and there are significant uncertainties in the short term like the state budget," said Zsolt Papp of KBC in London. "But growth prospects in Poland are more stable than elsewhere in the region."
While Poland is the only country in the region which has avoided deep recession, the zloty is also buoyed by the expectation that its central bank is unlikely to cut rates.
Hungary's bank (NBH) is seen continuing to slash rates to around 5.75 percent by next year from 7.5 percent now, while the Czech central bank said the crown had firmed too much and it might further cut its 1.25 percent main rate.[ID:nL58899]
Analysts expect the crown to firm slightly to 25.5 from Tuesday's 25.58 by the end of this month, to 25.25 in six months and 25 in 12 months.
Those forecasts are a shade firmer than one month ago. The 12-month forecast for the Hungarian forint improved, however, to 266 per euro from 272 a month ago.
Before strengthening, the currency is expected to retreat to 273.15 in the next six months, when the NBH is seen cutting interest rates, from Tuesday's levels around 267.
"Hungary has had a massive foreign trade surplus which helps stabilize the exchange rate," said Orsolya Nyeste of Erste Bank. "This is the key factor, I don't think that elections next spring could have a big impact on the forint."
The leu
RISKS REMAIN
While the Czech central bank is worried a strong crown can deepen recession, a 19.9 percent fall in Hungary's industrial output in August was also a reminder of the risks that domestic economic trends can pose to the currency. [ID:nL6653725]
The median forecasts in the poll show little exchange rate movement in the region in the next months, and many analysts believe an improvement in risk appetite in the world in the past months could continue to lend support to the currencies.
The individual forecasts stayed in wide ranges as some investors still expect a deterioration in global market sentiment, some for the end of this year, others for next year.
Danske Bank last month introduced "scorecards" for the region's currencies in its reports to help investors find their way among a multitude of economic, carry, technical and other domestic factors to differentiate between the region's assets.
"Our EMEA FX scorecard continues to send the most bullish signals for the zloty," Danske said in a note dated October 2. The long-term valuation of the zloty looks particularly attractive and we therefore see value in being long in the zloty versus other currencies in the region."
For data please click on
To see latest poll on major currencies, please see
For more analyst comments on CEE currencies please click on [ID:nL6267622]
(Reporting by Sandor Peto)