The forint and Hungarian government bonds took a breather on Monday after last week's weakening, a day before a meeting of the National Bank of Hungary whose ultra-loose policy has come under fire as US interest rates rise. The dollar's strength continues to put pressure on Central European currencies. The zloty shed 0.2 percent and the leu and the Czech crown 0.1 percent by 0913 GMT.
The forint's easing was hardly noticeable, but trading at 322.7 against the euro it was near the 3-year lows it hit at 323.95 on Friday. Hungary's 10-year government bond yield was steady at 3.46 percent, but it stayed well above Poland's corresponding yield which dropped 2 basis points to 3.22 percent.
Early this year, it was more than one percentage point below its Polish peer. Since then a global rise in debt yields has shattered the credibility of the Hungarian central bank's goal to keep long-term yields relatively low.
The rise came just as Hungary boosted debt issuance to pre-finance EU-sponsored projects and cover a 1.3-billion-euro bond expiry a week ago, and coincided with a pick-up in inflation in May across Central Europe. Elsewhere, the zloty was flat after new data showed a 7 percent annual rise in wages in May, a strong rate, though a tad below expectations.
The Polish central bank has also pledged to keep short-term interest rates on hold at record lows for years, but had no target for long-term yields. The crown eased slightly to 25.735 versus the euro.