WARSAW, July 24 (Reuters) - The forint weakened further

on Wednesday after Hungary's central bank cut interest rates and

signalled more easing, while the crown also sagged ahead of a

Czech policy meeting next week that could see a debate on

maintaining a cutting pace.

On Tuesday, the National Bank of Hungary (NBH) delivered its

15th successive rate cut, lowering its base rate by another 25

basis points to 6.75%, in line with a narrow consensus. That

brought the total scale of easing to 1,125 bps since May 2023.

NBH deputy governor Barnabas Virag said that one or two

further rate cuts expected by economists before the end of 2024

looked realistic. He added that inflation could come in below

market expectations in the second half despite somewhat stronger

repricing than in the past.

"Yesterday's rate cut is just a confirmation for markets of

the current market pricing and will be a trigger for HUF

(forint) to weaken," ING analysts said in a note.

By 0923 GMT, the forint was down 0.4% against the

euro to 392.05, continuing to retreat from a 1-1/2-month high

set on Monday.

ING analysts said that while low summer liquidity could

bring surprises, the forint was heading for 394 per euro in the

coming days and towards the top end of the 385-400 range which

they see it trading within the medium term.

A Budapest-based trader said a poor PMI reading across

Europe has caused investor blues and sent the euro lower against

the dollar. A firming dollar often signals risk aversion among

investors, including towards emerging market currencies.

Meanwhile, the Czech crown, which has been

weakening since Monday, hit a five month low before cutting its

morning losses and shedding 0.1% to 25.4020 per euro.

The Czech crown is on the defensive after central bank

Vice-Governor Jan Frait did not rule out the option of another

50-bp interest rate cut next week despite previous signals the

bank would slow its easing pace.

"We believe that debate on a 50-bp cut may be on the table,

but we think that in view of more cautious ECB rate cuts..., the

CNB will ultimately be more cautious," CSOB analysts said in a

note, adding preliminary second-quarter GDP data due just before

the rate meeting would provide clearer clues.

In Poland the zloty traded flat at 4.2790 per

euro.

Alior Bank analysts noted that the zloty managed to resist

Tuesday's increased risk aversion in the markets and traded

even. "Nevertheless, current weak market sentiment may put some

pressure on the Polish zloty to weaken."

CEE SNAPSHOT AT

MARKETS 1123 CET

CURRENCI

ES

Latest Previous Daily Change

trade close change in 2024

Czech 25.4020 25.3870 -0.06% -2.76%

crown

Hungary 392.0500 390.5750 -0.38% -2.26%

forint

Polish 4.2790 4.2785 -0.01% +1.53%

zloty

Romanian 4.9700 4.9726 +0.05% +0.09%

leu

Serbian 116.9500 117.0500 +0.09% +0.25%

dinar

Note: calculated from 1800 CET

daily

change

Latest Previous Daily Change

close change in 2024

Prague 1611.40 1618.360 -0.43% +13.96%

0

Budapest 73424.33 73622.19 -0.27% +21.12%

Warsaw 2445.55 2445.06 +0.02% +4.38%

Bucharest 18713.72 18696.86 +0.09% +21.75%

Spread Daily

vs Bund change

in

Czech spread

Republic

2-year 5-year 10-year Poland

2-year 5-year 10-year FORWARD

3x6 6x9 9x12 3M

interban

k

Czech Rep Hungary Poland Note: FRA are for ask prices

quotes

**************************************************

************