Currencies unchanged as markets await key US job report

Central European currencies were mostly stable on Friday ahead of the publication of key US labour market data later in the day and investors in Romania were awaiting an interest rate decision with markets expecting no change.

Investors did not react to Thursday's press conference of the governor of the National Bank of Poland (NBP), Adam Glapinski, who commented on the bank's decision to keep interest rates unchanged on Wednesday.

He said Poland may cut rates after the publication of central bank economic forecasts in March, possibly in the second quarter.

Falling financing costs in Hungary and the Czech Republic have been a drag on the countries' currencies while stable rates in Poland support the zloty, even though a strengthening dollar weighs on all of the region's currencies.

"As expected, the EUR/PLN exchange rate continued towards 4.30... which is supported primarily by the rising prices on global dollar markets," Bank Millennium analysts wrote in a note.

"We still think that the area around 4.30 - 4.3120 should be sufficient to stop the current weakening pressure on the zloty, if any no new relevant information appears on the market."

The zloty was unchanged at 4.3090 per euro by 0837 GMT.

Romania's central bank holds a rate-setting meeting on Friday and a majority of analysts expect policymakers to hold the benchmark at 6.50 per cent after two consecutive cuts.

Analysts expect one more 25 bps cut this year in November, the last bank meeting of the year.

"On one side is the rebounding credit market, wages and loose fiscal policy speaking against further rate cuts. On the other, inflation is lower than expected and the economy is surprising on the negative side," ING economists said.

"However, it's hard to expect any reaction from the RON which remains firmly anchored just below 5.00 EUR/RON and we don't expect any changes here in the near term."

The leu was traded at 4.9767 per euro, unchanged on the day.

The Hungarian forint was also stable at 401.6000 per euro, still near an 18-month low to which it fell on Wednesday, when it was pressured by a stronger dollar as the conflict in the Middle East made investors risk-averse.

"The euro-forint rate stabilized above 400 forints. ... There is still a significant resistance level at 403.50," brokerage Equilor wrote in a client note.        

The Czech crown was a touch down at 25.3480 per euro.

"In the absence of domestic macro figures, developments abroad will be important - not only events in the Middle East but also closely watched figures from the US labour market which could bring more gains to the dollar and put the crown under pressure again," bank CSOB said.