CEE MARKETS-Zloty hits five-year high on weaker dollar amid tariff uncertainty

By Anita Komuves

BUDAPEST, Jan 22 (Reuters) - The Polish zloty rose to nearly five-year highs on Wednesday, helped by a weakening dollar as market participants were looking to U.S. President Donald Trump for further clues on his future trade and tariff policies.

The zloty firmed EURPLN= 0.3% to 4.239 to the euro, its strongest since February 2020.

"This is more the result of the dollar weakening," a currency trader in Warsaw said. "As I see it, foreign investors are buying the zloty... Foreign banks are coming to the conclusion that the zloty is relatively attractive."

The zloty was the only central European currency to post a gain in 2024 as Poland's central bank (NBP) left rates unchanged while others in the region eased policy.

Polish central bank governor Adam Glapinski said last week that there was no room for monetary policy change now and any discussion about interest rate cuts must be delayed.

"We expect the EUR/PLN to go lower from Q2 due to a weaker dollar and a hawkish NBP, coupled with a positive current account and FDI (foreign direct investment) inflows," Bank of America said in a client note.

Elsewhere, the Czech crown EURCZK= was stable, trading at 25.126 to the euro around one-week highs.

Central European currencies experienced some relief on Tuesday after Trump's first moves as president did not include tariffs that could hit the region's export-dependent economies.

Late on Tuesday Trump said that his administration was considering imposing a 10% tariff on Chinese goods starting on Feb. 1. He previously said that Mexico and Canada could face tariffs of around 25% from the same date.

The forint EURHUF=, central Europe's worst performer last year as it lost 6% versus the euro, slipped 0.1% to trade at 411.7, underperforming regional peers.

"There is no drama, the forint is still trading in its recent range, and there is very little liquidity," an FX trader in Budapest said. "Investors are waiting to see if and when Trump gives any details about his tariff plans."

Stocks in the region were stronger, with Warsaw's index .WIG20 leading gains as it added 1.18%.

Shares in Polish miner JSW JSW.WA were down around 3% after methane ignited at one of its mines.

(Additional reporting by Karol Badohal in Warsaw and Jason Hovet in Prague
Editing by Gareth Jones)

((komuves.anita@thomsonreuters.com)(+36 70 795 8815))

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