Romanian leu retreats from S&P-driven rally; Hungarian forint leads regional peers

BUDAPEST, Oct 6 (Reuters) — The Romanian leu eased on Tuesday, shedding some gains from the previous session, while the Hungarian forint outperformed regional peers after a top central banker reaffirmed a pledge to join the euro zone. 3520 per euro, retreating from a high hit in the previous session after S&P maintained Romania's investment-grade rating. "The affirmation will allow the National Bank of Romania (NBR) to re-establish control over EUR-RON. But, such support cannot sustainably offset political paralysis, high inflation and structurally weak fiscal and external accounts," Commerzbank wrote in a note.

39 per euro last week as a political crisis increased borrowing costs and threatened the country's investment-grade status. Late on Monday, Romanain President Nicusor Dan nominated diplomat Luca Niculescu as prime minister in the fourth attempt in five months to end the crisis and advance much-needed budget deficit reduction. 90 per euro after a senior central bank official reaffirmed the country's commitment to joining the euro zone. "Lower energy prices are helping the forint, and it was also boosted by central banker comments reaffirming the country's commitment to joining the eurozone," an FX trader in Budapest said.

Hungary should not delay entry into the Exchange Rate Mechanism, the waiting room of the euro, if the market finds the government's euro adoption road map to be presented later this month credible, central bank Deputy Governor Zoltan Kurali said at a conference on Tuesday. The forint, Central Europe's best performer so far this year, has been supported by an agreement on European Union funds and the government's pledge to join the euro zone. 3740 to the euro. The Polish Monetary Policy Council starts a two-day meeting today, with its rate decision due to be published on Wednesday.

Analysts expect no change. "The session on the domestic financial market on Tuesday may once again be driven by technical factors and the external environment," Bannk Millenium wrote in a client note. 4520 to the euro. 5%.

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