CEE MARKETS-FX stable as markets eye ECB meeting

By Anita Komuves

BUDAPEST, April 17 (Reuters) - Central European currencies held stable on Thursday while stocks firmed as markets were looking ahead to a rate meeting by the European Central Bank later in the day.

The ECB is expected to cut interest rates for the seventh time in a year on Thursday, looking to prop up an already struggling economy that will take a large hit from U.S. tariffs.

While U.S. President Donald Trump has paused most of the heftiest tariffs, many remain in place and volatility in financial markets has already done damage.

"CEE currencies will be looking to the ECB meeting today, but that should confirm the current market stance and not show much change for CEE," ING wrote in a note.

"Still, we believe the ECB will be an important benchmark for CEE central banks as they face U.S. tariffs and the deteriorating economic outlook," ING said.

Hungary's forint EURHUF= was little moved, trading at 407.65 per euro, moving away from a near three-month-low hit on Monday.

"The forint has stabilised. The EUR/HUF exchange rate is trading below the short-term resistance level of 408.50, while the next significant support is seen at 405. ... however, this afternoon’s ECB interest rate decision could stir up fresh movements in the currency market," brokerage Equilor wrote.

The forint was helped this week by comments from incoming Central Bank Deputy Governor Zoltan Kurali who said on Tuesday that the bank must maintain a positive real interest rate to ensure both financial market and price stability.

The Polish zloty EURPLN= was stable, halting losses after slipping to a four-and-a-half month low in the previous session. The currency traded at 4.2815 versus the euro.

"The EUR/PLN rate may move in the range of 4.26-4.30 in the near future. The day will be dominated by the meeting of the European Central Bank, and the expected cut will support market rates at low levels," Bank Millennium wrote.

Earlier this month, Poland's central bank governor Adam Glapinski said interest rates could be cut as soon as May if incoming economic data supported the easing of inflation pressures. Borrowing costs in Poland have remained unchanged since October 2023.

The Czech crown EURCZK= was a touch weaker, trading 0.05% down versus the euro at 25.03.

Stocks were higher, with Warsaw's equities .WIG20 leading gains as the index added 1.4%. Budapest .BUX was up 0.1% while Prague .PX added 0.3%.

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