EMERGING MARKETS-Poland's zloty holds ground ahead of rate verdict

Most currencies in emerging Europe held steady against the euro on Thursday, with Poland's zloty at over three-week lows ahead of a central bank rate decision later in the day, while Polish stocks outpaced regional peers on upbeat results. The zloty held steady at 4.29 per euro, its lowest level since mid-April ahead of a decision by the central bank, which is expected to leave rates unchanged at 5.75%.

Most currencies in emerging Europe held steady against the euro on Thursday, with Poland's zloty at over three-week lows ahead of a central bank rate decision later in the day, while Polish stocks outpaced regional peers on upbeat results.

The zloty held steady at 4.29 per euro, its lowest level since mid-April ahead of a decision by the central bank, which is expected to leave rates unchanged at 5.75%. "The NBP is tipped to leave rates at 5.75% for the seventh consecutive meeting and guide for policy (to) stay as at present until the end of the year," Societe Generale strategists said.

"A hawkish hold could tempt sellers of EUR/PLN to have a go at the April lows near 4.25." The Czech crown was flat at 24.9 per euro after data showed March retail sales rose more than expected to 6.1% against expectations of a 2.7% increase.

Hungary's forint was also flat at 388.4 per euro, while South Africa's rand gained 0.2% after falling for the last two sessions. Currencies in emerging Europe have been under pressure lately as most central banks in the region stepped up policy easing amid signs of falling inflation.

As of 0816 GMT, MSCI's index for emerging market currencies slipped 0.1%, while a gauge for stocks lost 0.2%. Poland's WIG 20 stock index advanced 0.7%, boosted by a 1% rise in PKO BP after the country's biggest bank beat market expectations for first-quarter net profit.

Russia's rouble-denominated stock index gained 0.1%, while shares in Johannesburg fell 1%. Helping stave off steep losses on the broader MSCI index, Chinese bourses closed nearly 1% higher after data showed the country's exports and imports returned to growth in April after contracting in the previous month, signalling an encouraging improvement in demand at home and overseas.

Elsewhere in emerging markets, Malaysia's central bank kept its benchmark interest rate unchanged at 3%, in line with market expectations. Later in the day, central bank action will take centre stage once again with rate verdicts due in Mexico and Peru.

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