By Sandor Peto BUDAPEST (Reuters) - Central European currencies are set to gain ground in the next 12 months but by less than predicted a month ago as economic recovery appears to be slowing and tension in Ukraine poses risks, a Reuters poll shows.
The poll of 30 analysts taken Aug. 5-6 showed the Polish zloty <EURPLN=> would lead the rise, firming 4.1 percent against the euro from Wednesday's close to 4.03 by August 2015.
The Hungarian forint <EURHUF=> is forecast to gain 3.5 percent to 305, the Czech crown <EURCZK=> 2 percent to 27.25 and the leu <EURRON=> 1.2 percent to 4.39 in a year's time.
Gains are based on expectations that economies in the region will continue to pick up, albeit gradually, but in the short term Central European currencies are likely to continue to feel pressure from tension in Ukraine.
NATO said on Wednesday that Russia had massed combat-ready troops on Ukraine's border and Russia, in retaliation for Western sanctions, imposed a ban on food imports from Poland and other EU countries, which could affect economies in the region.
Recent data has already indicated that growth in the region is slowing, raising the prospect of more interest rate cuts in Poland and adding to pressure on currencies.
The crown fell to its weakest level since September 2009 this week, the forint hit January 2012 lows and the zloty visited three-month lows.
"The main risks to the zloty still stem from political turmoil abroad and from the risk of monetary easing in Poland. Therefore, the higher will be the focus on incoming macro data before the (central bank) meets in early September," said Dorota Strauch, an analyst at Raiffeisen in Warsaw.
Rising expectations that the U.S. Federal Reserve could raise interest rates earlier than expected if the U.S. economy performs well could also dampen the appeal of high-yielding emerging market assets.
SHAKY ROAD FOR FORINT
The forint could also face a bumpy road in the short term.
The poll sees a gradual 2.7 percent gain for the currency in the next six months, but some analysts said more losses towards record lows at 324 are likely in the short term.
Junk-rated Hungary's central bank finished its rate easing last month but two years of cuts have brought its base rate to 2.1 percent, below 2.5 percent in investment-grade-rated Poland.
Andras Balatoni, an analyst at ING in Budapest, forecast the forint could weaken to 320 against the euro by September.
"We will see negative headlines on Hungarian banks including capital injections to them," he said.
Hungary is expected to pass a bill in the autumn that will force banks to settle refunds to borrowers on past loans, which could cost the sector 900 billion forints (2.25 billion). Another government plan to convert foreign currency loans into forint could cause further big losses to banks.
This week the slide in Central European currencies extended to the crown, which had hardly moved since November due to interventions by the Czech central bank to ward off the threat of deflation.
Unlike in Poland, recent Czech economic data has suggested a pickup in economic growth.
But Russia's food import bans could create excess food supply in Europe and further push down Europe's very low inflation. As a result, the Czech central bank may want an even weaker crown. It had kept it at around 27 to the euro since November but the crown briefly dipped to below 28 this week.
Commerzbank said the Czech central bank could consider moving its crown threshold to weaker levels if the sanctions row escalates, further damaging Europe's economic recovery.
"(But) as EUR/CZK has already appreciated without central bank intervention this reduces the necessity for actual CNB (central bank) activity," it said in a note.
In last month's poll analysts saw the zloty at 4.02 in 12 months and forecast 302.50 for the forint on a 12-month horizon, 27 for the crown and 4.39 for the zloty.
The forecasts in Thursday's poll for end-2014 are also significantly weaker than analysts' forecasts early this year.
(Additional reporting by Jason Hovet in Prague; Editing by Susan Fenton)