CEE MARKETS-Hungarian forint nudges up from year low hit on central bank-government rift

By Anita Komuves BUDAPEST, March 13 (Reuters) - Hungary's forint firmed slightly on Wednesday after plunging to a fresh one-year low in the previous session as investors were concerned by a deepening rift between the Hungarian government and the central bank. The currency, the worst performer among its CEE peers in 2024, added 0.33% on the day to trade at 398.3 per euro, after easing to 399.65 on Tuesday. "All technical indicators suggest a correction after yesterday's plunge," an FX trader in Budapest said. "The strong psychological level at 400 could hold back the forint from further weakening in the short term, but sooner or later that level will be broken as well." The currency fell on Tuesday after the National Bank of Hungary doubled down on its criticism of a proposed law change that the bank says could erode its independence. The government, which says the bank's independence would remain intact, is expected to discuss the proposed changes later in the day. The forint was also pressured by news that the European Parliament was seeking to overturn a decision that released 10 billion euros of EU funding to Hungary. Elsewhere, the Czech crown held at stronger levels it has stabilised around in recent weeks after touching 2-year lows in early February, helped by central banker comments before next week's rate meeting which pushed back against market expectations of a possible sharper cut to interest rates. "Those are clear signals, in our view, in favour of a 50 bps cut next week," bank CSOB analysts said. Market interest rates ticked up in the past day on the short end, as investors reduced bets on the size of a cut. The currency was trading at 25.28 versus the common currency. The Polish zloty held on to its recent gains, which have made it the region's strongest performer this year, and was trading at 4.2865 per euro. "The key for the EUR/PLN position - from a technical point of view - is to keep it below 4.30, which maintains a pro-zloty attitude," Bank Millennium wrote in a note. Stocks in the region were mixed, with Budapest broadly flat while Warsaw added 0.32%. Prague's equities were 0.29% higher. CEE SNAPSH AT MARKET OT 1007 S CET CURREN CIES Latest Previo Daily Change us trade close change in 2024 EURCZK Czech 0 0 % EURHUF Hungary 00 00 % EURPLN Polish % EURRON Romanian % EURRSD Serbian 00 00 % % Note: calculated 1800 daily from CET change Latest Previo Daily Change us close change in 2024 .PX Prague 1472.2 1466.8 +0.36 +4.12 1 800 % % .BUX Budapest 66414. 66455. -0.06% +9.56 96 07 % .WIG20 Warsaw <.WIG2 2432.7 2425.0 +0.32 +3.83 0> 9 9 % % .BETI Buchares <.BETI 16256. 16232. +0.15 +5.76 t > 54 10 % % Spread Daily vs change Bund in Czech spread Republic CZ2YT= 2-year 0 ps CZ5YT= 5-year ps CZ10YT ps Poland PL2YT= 2-year ps PL5YT= 5-year ps PL10YT ps FORWAR D 3x6 6x9 9x12 3M interb ank Czech Hungary Poland Note: are for ask FRA prices quotes **************************************** ********************** (Additional reporting by Jason Hovet in Prague, Pawel Florkiewicz in Warsaw and Luiza Ilie in Bucharest; Editing by Ros Russell)