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CEE MARKETS-Forint off lows, zloty unmoved by inflation drop

By Boldizsar Gyori BUDAPEST, Sept 29 (Reuters) - Hungary's forint recovered from a six-month low on Friday while the Polish zloty stayed on firmer ground, even as inflation data pointed to chances of a further interest rate cut as central European markets got a brief respite from recent pressure. Polish inflation slowed more than expected in September, preliminary statistics office data showed on Friday, backing market expectations the country's central bank will continue to ease policy when it meets next week. Central European currencies have fallen under sharper pressure this month, especially after the Polish central bank surprised with a stronger-than-expected interest rate cut to launch its easing cycle at the start of the month. Hungary has already been loosening policy since May, and the outlook for lower interest rate differentials in central Europe versus the euro zone - as the European Central Bank keeps tight policy - has put a drag on the region's currencies. Data on Friday also showed euro zone inflation fell to its lowest level in two years in September. At 0917 GMT, the forint was 0.3% stronger at 391.25 versus the euro, off a six-month low of 394.60 hit on Thursday. "Volatility remains high as shown by the forint moving between 390-393 since the morning," Zoltan Arokszallasi, Head of Analyses at Equilor bank, said. The zloty inched up 0.05% to 4.637 per euro. With inflation continuing to slow, Polish markets are pricing chances of another interest rate cut at a policy meeting next week. "September's price development indicates another rate cut at the next week's NBP meeting," Erste Group Bank said. The Czech central bank, meanwhile, has shown no rush to join peers in easing policy, and gave few clues at a Wednesday policy meeting for when a first interest rate cut might come. Markets have bet on a cut by the end of the year, although rate markets have ticked higher since Wednesday. The crown was down less than 0.1% at 24.37 per euro, coming after a one-day trading holiday on Thursday. CEE MARKETS SNAPSHO AT T 1117 CET CURRENC IES Latest Previou Daily Change s bid close change in 2023 EURCZK= Czech crown 24.3700 24.3500 -0.08% -0.87% EURHUF= Hungary 391.250 392.550 +0.33% +2.09% forint 0 0 EURPLN= Polish zloty 4.6370 4.6395 +0.05% +1.13% EURRON= Romanian leu 4.9740 4.9731 -0.02% -0.63% EURRSD= Serbian 117.160 117.215 +0.05% +0.12% dinar 0 0 Note: daily calculated from 1800 change CET Latest Previou Daily Change s close change in 2023 .PX Prague 1347.72 1340.96 +0.50% +12.15 00 % .BUX Budapest 55375.0 55379.7 -0.01% +26.44 1 2 % .WIG20 Warsaw 1915.61 1884.74 +1.64% +6.90% .BETI Bucharest 14451.3 14214.4 +1.67% +23.90 9 0 % Spread Daily vs Bund change in Czech spread Republic CZ2YT=RR 2-year 5.0840 0.0280 +185bp +10bps s CZ5YT=RR 5-year 4.9590 0.0150 +215bp +12bps s CZ10YT=RR 10-year 4.7540 0.0370 +191bp +16bps s Poland PL2YT=RR 2-year 5.0470 -0.0920 +182bp -2bps s PL5YT=RR 5-year 5.2530 -0.0640 +244bp +4bps s PL10YT=RR 10-year 5.9290 -0.0400 +308bp +8bps s FORWARD 3x6 6x9 9x12 3M interba nk Czech Rep 6.72 6.12 4.95 7.09 Hungary 10.97 9.64 8.50 12.27 Poland 4.84 4.30 4.12 5.78 Note: FRA are for ask quotes prices ************************************************* ************* (Reporting by Boldizsar Gyori in Budapest and Pawel Florkiewicz in Warsaw; editing by Jason Hovet and Varun H K)