By Gergely Szakacs BUDAPEST, June 28 (Reuters) - The Hungarian forint and Poland's zloty led a rebound of central European currencies in Tuesday morning trade as investors looked past the first shock of Brexit and focus shifted to the region's strong fundamentals.
At 0707 GMT, the region's most liquid currencies were 0.4 percent stronger, recouping some of the sharp falls posted in the wake of last week's decision by British voters to leave the European Union, which thrust global markets into turmoil.
A currency dealer in Warsaw said Brexit did not result in stronger, steady outflows and the opportunity was seized by local exporters to sell foreign currencies at better rates.
"I don't expect any further Brexit-related steps to be taken by the British before they have a new prime minister, and this creates a chance for a (market) rebound," the trader said.
"There probably won't be a massive rally but the zloty could soon reach pre-referendum levels (4.35 per euro). Much higher interest rates in Poland than in the U.S. or in the EU are in favour (of the Polish currency)." A currency dealer in Budapest added that in the near term, Brexit would hit the British bank sector the hardest, while its precise longer-term consequences, which could take effect only years from now, were nigh impossible to price in.
"There was a massive panic in the first two days and now, given that there is no immediate, spectacular change in the situation, volatility has declined and EUR/HUF has also managed to calm down somewhat," the trader said.
"We have not fully recovered, but Hungary's fundamentals, such as the current account surplus, EU fund inflows or foreign remittances continue to support the forint," he said, adding it could settle in a new range of 312.5 to 318 versus the euro.
CSOB analysts warned however that heightened uncertainty limited room to recoup losses.
Central European stocks were also off to a strong start, with shares in Prague, Budapest and Warsaw all posting gains in excess of one percent.
Shares in central Europe's largest independent lender, OTP Bank, often a harbinger of wider market sentiment towards Hungary, gained 1.9 percent in early trade, with other blue-chips also just in the black.
Analysts at Commerzbank said in a note it may take some time before Brexit's specific impact on central European economies gets any clearer.
"It makes no sense to draw up impact estimates based on a country's total exposure to the UK on trade, labour market and banking system," Commerzbank said.
"Brexit will change the legal framework within which such exposures operate, but not necessarily eliminate them. For the moment, we mainly have to weigh generic risk aversion and its spillover versus local monetary and fiscal policy." CEE SNAPSHOT AT 0907 CET MARKETS CURRENCIES Latest Previous Daily Change bid close change in 2016 Czech crown 27.1500 27.1570 +0.03% -0.56% Hungary 316.6500 317.9000 +0.39% -0.63% forint Polish 4.4325 4.4501 +0.40% -3.94% zloty Romanian 4.5184 4.5205 +0.05% 0.01% leu Croatian 7.5120 7.5165 +0.06% 1.69% kuna Serbian 123.6100 124.0000 +0.32% -1.73% dinar Note: daily calculated previous close at 1800 change from CET STOCKS Latest Previous Daily Change close change in 2016 Prague 803.09 790.09 +1.65% -16.02 % Budapest 25686.47 25390.23 +1.17% +7.38 % Warsaw 1758.30 1732.19 +1.51% -5.42% Bucharest 6322.52 6271.89 +0.81% -9.73% Ljubljana 0.00 677.56 +0.00% -100.0 0% Zagreb 0.00 1649.57 +0.00% -100.0 0% Belgrade 0.00 600.03 +0.00% -100.0 0% Sofia 453.99 453.99 +0.00% -1.50% BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic 2-year -0.021 0.055 +062bp +5bps s 5-year 0.112 0.008 +065bp +0bps s 10-year s Poland 2-year #VALUE! -0.022 #VALUE! -3bps 5-year 2.331 0.011 +286bp +0bps s 10-year s FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M interb ank Czech Rep Hungary Poland Note: FRA are for quotes ask prices ************************************************************ ** (Reporting by Reuters bureaux; Writing by Gergely Szakacs; Editing by Andrew Heavens)