PRAGUE, Oct 20 (Reuters) – The forint drifted off a 16-month high versus the euro on Monday with Hungary's central bank expected to keep interest rates on hold this week and resist pressure to renew easing, while central Europe's currencies also held near strong levels. Poland's zloty was near a two-month high hit on Friday, and the Czech crown was less than half a percent off a 25-month peak touched earlier in October. Currencies have bounced around this month, mainly on the back of U.S. dollar movements, with a weaker dollar generally giving space for gains. Markets will also focus locally on a Hungarian interest rate decision due on Tuesday, with analysts expecting the bank's year-long rate freeze to extend into 2026 due to inflation pressures and despite government pressure for policy easing. The pause, leaving the main rate at a joint EU-high of 6.50%, has helped keep up support for the forint. "We expect the policy rate to remain stable at 6.5%, with the central bank likely to maintain a relatively hawkish stance, downplaying expectations of monetary easing," Erste Group Bank said in a note. The forint was 0.1% lower by 0846 GMT, at 389.90 per euro, hovering off a high of 387.60 hit earlier this month. ING analysts said the hawkish stance would continue to bolster the forint. Similarly, the Czech central bank has paused policy since last cutting in May, and policymakers' hawkishness was support for the crown, ING said. On the other hand, the zloty was reaching the strong end of its range seen in recent months, and room for gains may be limited. The zloty and the Czech crown were both down a touch from Friday's domestic close, at 4.2405 and 24.314 to the euro, respectively. Strong economic data have been holding up the zloty even as Poland's policymakers have been cutting interest rates at recent meetings. The zloty was buoyed after industrial output grew more than expected in September, data on Monday showed. Markets were also boosted by easing tensions in trade wars between China and the United States as U.S. President Donald Trump toned down some rhetoric. Stock markets in central Europe all gained on Monday, led by a more than 1% rise in Warsaw blue chips. CEE MARKETS SNAPSHOT AT 1046 CET CURRENCIES Latest Previou Daily Change trade s close change in 2025 Czech 0 Hungary 00 0 Polish Romania Serbian 00 0 % Note: daily change calculated from 1800 CET STOCKS Latest Previou Daily Change s close change in 2025 Prague 2343.0 2340.55 +0.11 +33.11 3 00 % % Budapes 103517 102968. +0.53 +30.50 t .51 67 % % Warsaw 2 % % Buchare 21836. 21777.3 +0.27 +30.60 st 53 9 % % BONDS Yield Yield Spread Daily (bid) change vs change Bund in spread Czech ps 2-year Czech ps 5-year Czech ps 10-year Poland ps Poland ps Poland ps FORWARD RATE 3×6 6×9 9×12 3M AGREEMENTS interba nk Czech Poland Note: FRA quotes are for ask prices (Reporting by Jason Hovet in Prague, Pawel Florkiewicz in Warsaw and Anita Komuves in Budapest; Editing by Andrew Heavens)
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