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Central European currencies set multi-week lows as three of the region's central banks which meet on Thursday were seen keeping rates on hold, while the dollar extended its gains.
Dollar buying often weighs on these currencies which have also been weakened by weak economic data from the region and the euro zone, and soft comments from local central bankers.
After the Polish central bank kept rates on hold on Wednesday, the Czech, Romanian and Serbian banks looked likely to follow suit on Thursday.
The crown touched its weakest levels against the euro since Dec. 28. It traded at 25.82 at 0900 GMT, down 0.2 percent.
Its decline steepened on Monday after the Czech Republic reported a surprise annual fall in industrial output in December. It extended its loss on Tuesday after Czech Finance Minister Alena Schillerova projected spending cuts as slowing growth could cut state revenues.
A Reuters poll of analysts earlier this week still projected the crown could strengthen to 25.165 against the euro over the coming year.
The Czech National Bank (CNB) pays increasing attention to weak economic data from the world and particularly Germany, and expectations in Czech money markets have shifted to stability from higher rates, KBC analysts said in a note.
"That is one of the reasons why the CZK should not react to the outcome of the CNB's meeting strongly," they said.
The forint's market has also priced out expectations for short-term monetary tightening by the Hungarian central bank.
The forint, easing 0.2 percent, touched a 3-week low even though Hungary's volatile industrial output data showed 5.4 percent annual growth in December, almost twice as fast as expected.
The zloty eased to 4-week highs, after Polish central bank Governor Adam Glapinski said on Wednesday that he saw no need to change record-low interest rates this year and, most likely, next, as inflation remains in check.
"The dovish stance (of the bank)... will limit any upside for the Polish zloty over the coming months," Fitch Solutions Macro Research said in a note.
The Romanian central bank (NBR) has not been worried over inflation either.
Its comments will be still watched closely on Thursday as a new tax on bank assets including government bonds, linked to interbank interest rates, have caused jitters in Romanian markets.
"We wouldn't exclude a stern warning from NBR for the government which ironically can bear positive impact for long-end ROMGBs (bonds)," Raiffeisen analyst Gintaras Shlizhyus said in a note.
The leu was flat at 4.7395 versus the euro.

Copyright Reuters, 2019

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