CEE MARKETS-FX shrugs off global turbulence as stable rates support crown

WARSAW, Feb 6 (Reuters) - Central European currencies were holding steady on Friday despite tremors in global markets caused by fears over AI, as investors digested the Czech central bank's decision to maintain a cautious approach and leave rates unchanged.

The crown firmed around 0.5% against the euro on Thursday after the Czech National Bank (CNB) left its main rate unchanged at 3.50%, with Governor Ales Michl saying policymakers would need to see slower momentum in core inflation to allow for further easing.

It was trading at 24.247, close to Thursday's closing price, at 0924 GMT on Friday.

"Through 2025, the CZK appreciated by ~7% on a trade-weighted basis and the CNB's relatively hawkish stance is contributing to further appreciation pressure," Goldman Sachs said in a note.

Globally, financial markets were gripped by volatility, as silver and cryptocurrencies whipsawed and stock indices sank into the red after stocks on Wall Street sold off on Thursday for a third straight day on fears that new AI models may start to eat into the profits of software firms.

Central European currencies appeared unfazed, with the Hungarian forint EURHUF= trading flat at 378.95 and the Polish zloty EURPLN= firming 0.14% to 4.214.

"Emerging markets are favoured these days and money is flowing this way ... Investors are getting out of gold, silver, crypto and lots of things, and a record amount of money has been flowing into emerging markets in the past week," an FX trader in Budapest said.

"With our high base rate, Hungary still offers a good return for carry traders. As long as the rate is high, investors will buy the forint."

In Poland, investors were weighing comments from Central Bank Governor Adam Glapinski at a press conference on Thursday, after Wednesday's decision by the Monetary Policy Council to leave the cost of credit unchanged at 4.00%.

Glapinski said March could be a good moment to cut interest rates and that a possible target level for the main rate could be 3.50%, sentiments that were echoed by central bankers Henryk Wnorowski and Ludwik Kotecki in interviews with Reuters.

"Yesterday's ... conference basically did not change the perspective for monetary policy," an FX trader in Warsaw said. The zloty seemed immune to the volatility in global markets, the trader added.

"I must say that we cannot see much ... capital outflow based on risk aversion, which is rising," the trader said. "From that perspective, the zloty is sort of a safe-haven currency. Liquidity is still narrow, and the zloty is well supported."