FX steadies ahead of data cues

Central European currencies stabilised on Monday, as investors digested a brief flare-up in the Middle East conflict and awaited local and core market data due later this week.

Iran and the United States agreed to halt recent hostilities in the Gulf and renew talks regarding their dispute over the Strait of Hormuz, a U.S. official said on Sunday, raising hopes of saving an interim peace deal that was under pressure from days of tit-for-tat strikes.

The dollar was on track for its biggest monthly gain in nearly a year, as Gulf tensions and elevated Treasury yields underpinned demand ahead of key jobs data later in the week.

The firm dollar kept riskier assets, including Central Eastern European currencies, under pressure.

"Markets appear uncertain about the latest U.S.-Iran re-escalation. Despite the exchange of military strikes, oil has not seen a meaningful bounce, with investors sticking to the optimistic stance that has worked over the past month," ING analysts said in a note.

The Polish zloty OANDA:EURPLN was flat against the euro at 4.2885 by 0845 GMT, trading in the narrow range near 4.29 to which it slipped last week.

"This week, attention will be on Tuesday's inflation figures in Poland for June," ING analysts said, adding that after the downward surprise in May they expected a further decrease due to lower fuel prices and steady interest rates through year-end as a result.

Analysts at Polish state-owned development bank BGK said they saw no threat to the zloty's stabilisation scenario, expecting it to stay in the 4.28-4.29 range.

Later in the week, investors will also be eyeing June flash CPI in the eurozone, as well as a handful of U.S. data, including payrolls.

In Hungary, the forint FX:EURHUF edged 0.1% lower to 354.30 per euro.

"The forint firmed at the end of last week in a bit of a global risk-off mood and on lower oil prices, and now we see a small correction following that," a Budapest-based trader said, adding that it remained influenced by global news.

Brokerage Equilor put euro-forint support at 350 and short-term resistance at 355 per euro.

Elsewhere, the Czech crown OANDA:EURCZK was steady at 24.2690 per euro, as was the Romanian leu FOREXCOM:EURRON, which traded at 5.2425.