* Polish deficit data in line, FinMin FX plans in focus
* Forint on firming path, leu shrugs off dropped euro target
* Czech crown steady before government confidence vote
PRAGUE, April 26 (Reuters) - The Hungarian forint led
emerging European currencies on Tuesday, supported by fiscal
reform plans, while the Polish zloty recovered ground on finance
ministry plans to cash in euros on the market.
Gains were modest as investors awaited news from a two-day
policy meeting of the U.S. Federal Reserve at which policymakers
were likely to discuss when to begin exiting its ultra-easy
monetary policy.
Analysts mostly expect the Fed to stick to a plan to
complete a $600 billion bond-buying programme, keeping policy
loose at time when several central banks in Europe are moving to
raise interest rates.
A ratings warning last week for the United States also hit
the dollar, giving a boost to higher-yielding emerging market
currencies.
By 0930 GMT, the zloty <EURPLN=> added 0.15 percent to test
the 3.94 per euro level which has proven resistant since the
currency began a retreat at the end of February. The forint
<EURHUF=> added 0.2 percent to 264.2 to the euro.
"Emerging markets are still the part of the world that are
growing and doing quite well, and do not have the same debt
burden as others," a Stockholm-based currency dealer said.
"It is still an advantage to be in these markets, also for
carry (trade) reasons."
The Czech crown was steady ahead of a no confidence vote the
centre-right governing coalition was expected to survive with
something to spare.
Czech President Vaclav Klaus appointed two new ministers
last week in a cabinet reshuffle resulting from a corruption
scandal that nearly brought down the government. []
Romania's leu <EURRON=> rose 0.1 percent, shrugging off
widely expected news the government had scrapped a 2015 euro
adoption target.[]
Stock markets mostly slipped after re-opening following
Monday's holiday.
FIRMING SEEN
The forint, the region's top gainer so far in 2011, was
expected to stay on a firming path barring any unfavourable turn
in global risk aversion.
The currency has rallied as investors favoured it over
regional peers, mainly the zloty, on the back of reform plans
first unveiled by Budapest in March. Last week, parliament
approved a constitution with strict new rules to force the
country onto a declining debt path. []
"The forint is still fuelled by the government's reform
plans, which markets have appreciated of late, but it also needs
a sustained global risk appetite to remain on a firming track,"
a Budapest dealer said.
In Poland, statistics office data showed the general
government deficit, as measured by the EU's ESA 95 methodology,
stood at 7.9 percent of gross domestic product (GDP) last year,
in line with expectations. []
Polish bond yields were flat or a touch up.
Finance ministry plans to sell some of the euros Poland
receives from the European Union on the market has buoyed the
zloty after an initial weakening based on assumptions the move
would limit scope for interest rate hikes. []
"Taking into account the planned sale of EU funds on the
market we would not expect a large number of investors betting
on a weakening of the zloty," Bank BPH said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.109 24.111 +0.01% +3.7%
Polish zloty <EURPLN=> 3.941 3.947 +0.15% +0.43%
Hungarian forint <EURHUF=> 264.2 264.75 +0.21% +5.22%
Croatian kuna <EURHRK=> 7.353 7.356 +0.04% +0.37%
Romanian leu <EURRON=> 4.069 4.074 +0.12% +4.03%
Serbian dinar <EURRSD=> 100.62 100.61 -0.01% +5.27%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -11 basis points to -17bps over bmk*
7-yr T-bond CZ7YT=RR +6 basis points to +51bps over bmk*
10-yr T-bond CZ9YT=RR -2 basis points to +68bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +320bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +310bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +281bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +445bps over bmk*
5-yr T-bond HU5YT=RR -2 basis points to +417bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +372bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1132 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
Spot FX rates
Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Jason Hovet;
editing by Patrick Graham, John Stonestreet)
