Currencies flat as markets await data and banker statements

Central European currencies were little changed on Monday as the Labor Day holiday in the United States made trading thin and investors awaited economic data and comments from central bankers later in the week. 

The Hungarian forint edged down 0.05 per cent to trade at 392.7 versus the common currency. A Forex trader in Budapest, speaking on condition of anonymity, said Hungarian GDP data on Tuesday could influence the forint, although the bigger impact could be from US non-farm payroll data if it changes Fed rate expectations and moves the dollar. 

US employment data, including the payrolls report for August, could help to determine the extent of an all-but-certain September interest rate cut by the Federal Reserve. Markets were also looking ahead to speeches by Hungarian Central Bank Governor Gyorgy Matolcsy and Economic Minister Mihaly Varga, ING wrote in a note. 

Matolcsy is scheduled to speak on Thursday while Varga is speaking on Friday. In Poland, the zloty edged up 0.05 per cent to trade at 4.28 versus the common currency. "On the one hand, the zloty may be under pressure from the strengthening of the dollar, but on the other hand, it benefits from the lack of increased risk aversion in the markets," Alior Bank wrote. "This week, the key event in the country will be the decision-making meeting of the Monetary Policy Council... Maintaining interest rates at the current level (main 5.75 per cent) is certain, but the rhetoric will be interesting," the bank wrote. 

The National Bank of Poland is scheduled to announce its decision on Wednesday, while Governor Adam Glapinski is expected to hold a news conference on Thursday. Elsewhere, the Czech crown added 0.04 per cent to trade at 25.025, and the Romanian leu was also little changed. Stocks in the region were mixed, with Budapest's equities adding 0.14 per cent, while Warsaw was 0.39 per cent lower.