BUDAPEST/WARSAW: The zloty eased on Tuesday, trading near this year's weakest levels against the euro ahead of a Polish central bank meeting which is expected to see rates left on hold and new forecasts project moderate inflation.
Analysts in a Reuters poll unanimously forecast that the bank will keep interest rates unchanged at its meeting on Wednesday.
The central bank will publish its latest mid-term economic forecasts after the meeting.
"The latest inflation projection may surprise with its dovish tone, which could exert some pressure on the zloty," BZ WBK analysts said in their daily note.
The Polish unit eased 0.1 percent to 4.1937 against the euro, underperforming Central European peers which were either flat or firmed slightly.
The euro/dollar cross, often watched in the region's markets, gave no clear guidance, while a continuing rebound of equities after weeks of falling was a positive factor for currencies.
Dollar buying often causes selling of currencies in the region. They have been mostly rangebound in the past week as investors wait for clues about global trends from the European Central Bank's upcoming meeting and US economic data.
The breakdown of Hungary's fourth-quarter economic output data showed that a surge in household consumption and investments continue to boost growth, even though a pick-up in imports could narrow the country's big trade surplus.
The forint, like the zloty, is close to its weakest levels of the last few months as the Hungarian central bank keeps policy loose, unlike the Czech central bank which started to lift interest rates last year.
Poland's central bank is seen as unlikely to raise rates this year, and Hungary may keep them at record lows for years.
Regional equities benefited from a rebound in global share markets. Fears of a trade war between the United States and the European Union have eased, but have not passed, keeping investors cautious, analysts said.
Technical factors helped some Hungarian stocks after last month's decline caused by worsened global sentiment.
Budapest's main index rose 1.2 percent as the four companies which have the highest capitalization on the bourse firmed, including pharmaceuticals Richter, which gained 2.3 percent.
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