Forint underperforms

The Hungarian forint fell 0.3% versus the euro on Monday, giving back some of its early-December gains, as central Europe's worst-performing currency continued to seesaw between record lows and slightly stronger levels.

At 0952 GMT, the forint traded at 331.72 versus the euro, underperforming its regional peers, which were weaker or unchanged.

The forint has lost over 3% against the euro this year and hit successive record lows in September and November as Hungary's ultra-loose monetary policy compounded global market volatility over the US-China trade war and Brexit. It set its latest record-low at 337.21 per euro late last month.

"EURHUF touched the 330 support level on Friday, only to rebound immediately for an opening level around 331 this morning," analysts at Erste Investment said in a note.

"The 330 mark is has psychological significance anyway ... so this represents a strong technical level, which can put an end to the forint's strengthening seen since the end of November."

A currency dealer in Budapest said the forint would likely move in the 330 to 335 range in the next days, with attention shifting to Hungarian inflation data due on Tuesday and global central bank meetings later in the week.

Analysts polled by Reuters expect headline inflation rose to 3.3% in November, while core inflation stayed at 4%, the top of the Hungarian central bank's 2% to 4% target range.

The National Bank of Hungary will hold a monthly policy meeting on December 17, when it will release new forecasts from its quarterly inflation report, which forms the basis of any required policy changes. The bank has been relaxed about the weak forint and has reiterated its accommodative stance after its November meeting, even though some analysts have said its loose policy would weigh on the forint.

The Polish zloty eased 0.1% in early trade. Economists at Santander Bank Polska said the currency would remain driven by global data, especially the parliamentary election in the United Kingdom.

"The ECB and FOMC will decide about the interest rates. We do not expect any changes and we think that the central bank meetings will be overshadowed by the geopolitical issues," the economists said.