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dinar bucks risk aversion-driven weakening Monetary Unit Of Hungary , dinar bucks risk aversion-driven weakening
* Serbian central bank keeps 3 pct main rate on hold* Dinar firms, risk aversion weakens most other CEE units* Czech CPI retreat does not remove rate hike expectations (Recasts with Serbian central bank decision, analyst comment,regional currency poll)By Sandor PetoBUDAPEST, Aug 9 (Reuters) - The crown and dinar bucked afall in Central European currencies on Thursday as Czechinflation data kept alive expectations for higher interest ratesand the Serbian central bank left its benchmark rate unchanged.Investors mostly shunned currencies in emerging markets,with fresh U.S. sanctions knocking down the rouble and Turkey'slira also falling further.The forint and the zloty eased 0.3percent against the euro by 1303 GMT, even though they did notdrift far from multi-month highs on the firm side of the 320,and 4.27 lines, respectively.The leu, after setting a new two-week low, tradedat 4.651, down 0.2 percent.It fell from Friday's seven-month highs after the Romaniancentral bank earlier this week disappointed some investors bynot increasing its interest rates further, and said annualinflation could fall by the end of 2018 to 3.5, the top of itstarget rage, from 5.4 percent in June.Hungary's and Poland's central banks have retained theirloose monetary policy despite pressure on their currenciesbetween April and July due to flows into the rallying dollar.The dinar, on the contrary, was strengthened in the pastmonths by investments and remittances from Serbians workingabroad.The Serbian central bank, meeting on Thursday, did not reactto the past few months dinar selling with a cut in its 3 percentbenchmark rate, the highest in the region, citing a rise ininflation and in the interest rates of leading central banks.The dinar firmed 0.1 percent to 117.9 against theeuro."We expect that the NBS will keep the key rate at thecurrent level throughout the year, as we also expect a pickup ininflation and continuation of solid economic trends," Ersteanalyst Milan Deskar-Skrbic said in a note.The Czech crown also bucked the regional trend, gaining 0.1percent, to trade at 25.563.Czech annual inflation retreated to 2.3 percent in July from2.6 percent in June according to data published on Thursday.The figure is still above the Czech central bank's (CNB) twopercent target and in line with expectations, therefore it doesnot change expectations that the bank will continue to increaseinterest rates to fight inflation, analysts said."Although the July result was (by 0.3 percentage point)below the central bank's expectation, regional currency poll)By Sandor PetoBUDAPEST Monetary Unit Of Hungary ," said PavelSobisek, UniCredit UniCredit's Czech unit. Likely strong core inflation could even bring forward thenext CNB rate hike, Citigroup said in a note, adding that thehike could come earlier than the fourth quarter.According to an Aug. 6-8 Reuters poll of analysts, expectedCNB rate increases could strengthen the crown by 2.4 percentrelative to Wednesday's close to 25 versus the euro in thecoming year, while the leu is seen easing 1.5 percent to 4.71.CEE SNAPSHOT AT MARKETS 1503 CETCURRENCIESLatestPreviousDaily Changebid close changein 2018 Czech
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