CEE MARKETS-FX treads water as investors await planned Trump-Putin talks

By Anita Komuves

BUDAPEST, March 17 (Reuters) - Central European currencies were little changed on Monday as global political developments were expected to dominate investors' mood this week ahead of a planned phone call on the Ukraine war between the U.S. and Russian presidents.

U.S. President Donald Trump said that he planned to speak to Russian President Vladimir Putin on Tuesday and discuss ending the war in Ukraine, after positive talks between U.S. and Russian officials in Moscow.

"The Trump story is driving everything, markets are watching the news about Ukraine and tariffs," an FX trader in Hungary said.

"Until a major breakthrough on either of those, the forint could keep trading in its current range between 398 and 402."

The Hungarian forint EURHUF= slid 0.14% to trade at 399.5 per euro.

Elsewhere, the Polish zloty EURPLN= edged down 0.04% as it traded at 4.1795 to the euro, holding on to gains from the previous session.

News from Germany on Friday that German Chancellor-in-waiting Friedrich Merz has secured the backing of the Greens for a massive increase in state borrowing helped currencies in the region, analysts said.

"The story is moving in a positive direction for the region, with some progress in German politics and fiscal expansion and negotiations on a peace deal between Ukraine and Russia," ING wrote in a note.

"Both stories have somewhere to go and we think this will further support CEE FX," they added.

On Friday, data showed that Polish inflation was below analysts' estimates in February, in a reading likely to encourage more dovish members of Poland's Monetary Policy Council (MPC).

On Thursday the governor of the National Bank of Poland Adam Glapinski said there were no reasons for cutting interest rates at the moment due to the outlook for price growth.

Elsewhere, the Czech crown EURCZK= edged down 0.02% to 25.02 per euro.

Stock markets in the region extended their gains, with Budapest .BUX adding 0.4%. Warsaw .WIG20 was 0.5% higher while Prague .PX was up 0.1%.

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