Central European currencies are seen firming up in the next 12 months, helped by an economic recovery in Europe and greater global risk appetite as the Federal Reserve pumps cheap money into the US economy. Poland's zloty could lead the way with gains of about 4 percent versus the euro to 3.80 in a year's time, according to 37 analysts polled by Reuters from October 29 to November 2.
Romania's leu, Central Europe's underperformer this year, is seen firming by about 2 percent in the next 12 months to 4.19 to the euro, compared with 4.22 projected a month ago.
The Czech crown - the region's safe-haven unit and a strong outperformer in 2010 - is expected to gain about 1 percent to 24.25, compared with a 24.28 forecast a month ago. Hungary's forint could, however, remain flat after a two-month rally as 2011 state budget details published over the weekend resolved imminent deficit problems but left question marks over long term fiscal sustainability.
Investors continue to eye budget and debt dynamics and political fragilities in the region as European states struggle to cut deficit levels.
If the Federal Reserve effectively weakens the dollar by printing money, that helps Central Europe's currencies as it fuels risk appetite while having little impact on the region's exports, which mainly go to the eurozone. Hungary's forint has gained almost 6 percent against the euro in the past two months, well outperforming the region.