CEE MARKETS-Forint weakens before likely rate cut this week

By Boldizsar Gyori BUDAPEST, Sept 25 (Reuters) - The forint eased to its lowest in more than two weeks on Monday ahead of a Hungarian central bank rate decision, and as a strong U.S. dollar curbed central Europe's currencies. The National Bank of Hungary (NBH) will kick off a week of two closely watched rate calls on Tuesday. Analysts expect the NBH will cut its one-day quick deposit rate by a further 100 bps, to 13%. As Hungary's European Union high inflation rate decelerates and an economic slowdown deepens, policymakers are unwinding all of last October's emergency rate hikes designed to shore up the forint after it fell to record lows last year. ING said in a note the tone of communication after the meeting would likely remain hawkish, "leaving all options open from a pause to a 100 bps cut at the upcoming meetings, as the decision-making process is now agile and data-driven". Hungary's central bank Gyorgy Matolcsy said last Thursday the bank needed to maintain a gradual approach on all policy decisions. A Reuters poll last week predicted the base rate - now at 13% - would be reduced to 11.5% by the end of 2023 and to 6.5% by the end of 2024. Hungary's forint traded around a two week-low versus the euro at 390.05 at 0808 GMT. Although the rate decision on Tuesday is priced in by markets, some analysts say there is little scope for forint strengthen for now. The rest of central Europe was also stuck at weaker levels. Poland's zloty moved sideways, trading on the strong side of 4.6 versus the euro, but more than 2% weaker since a sharper-than-expected rate cut earlier in September. Analysts predict a Hungarian rate cut could boost the zloty, especially if Friday's Polish inflation data exceeds expectations. In the Czech Republic, where rates should stay on hold at a Wednesday policy meeting, the crown was also a touch stronger but still weaker than in early September. Data on Monday showed business sentiment was at a 2-1/2 year low in September. CEE SNAPS AT 1008 MARKE HOT CET TS CURRENCIES Lates Previ Daily Chang t ous e bid close chang in e 2023 EURCZ Czech 10 00 4% % EURHU Hunga 500 500 % 1% forin t EURPL Polis 5 5 0% 8% zloty EURRO Roman 0 8 4% % leu EURRS Serbi 600 000 3% 2% dinar Note: calculated 1800 daily from CET chang e Lates Previ Daily Chang t ous e close chang in e 2023 .PX Pragu 1347. ##### +0.1 +12. e 51 ### 5% 13% .BUX Budap <.BUX 55760 55376 +0.6 +27. est > .68 .10 9% 33% .WIG2 Warsa <.WIG 1949. 1949. +0.0 +8.8 0 w 20> 99 25 4% 2% .BETI Bucha <.BET 14426 14413 +0.0 +23. rest I> .61 .59 9% 69% Sprea Daily d vs chang Bund e in Czech sprea Republic d CZ2YT 0 40 bps s r CZ5YT 0 80 bps r CZ10Y Polan d PL2YT 0 0 bps s r PL5YT 0 0 bps r PL10Y FORWA RD 3x6 6x9 9x12 3M inter bank Czech

Hunga Polan Note: are for ask FRA prices quote s **************************************** ********************** (Reporting by Boldizsar Gyori in Budapest; editing by Barbara Lewis)