* FX down on worries over global rebound
* Concerns on foreign currency loans weigh on forint
* Surging exports help manufacturing in Poland, Czech Rep
(Updates throughout)
By Sam Cage and Dagmara Leszkowicz
BUCHAREST/WARSAW, July 1 (Reuters) - Central Europe's
currencies came under renewed pressure on Thursday from concerns
over the region's exposure to foreign currency loans and over
dimming prospects of a global economic rebound.
The region's markets are supported by relatively high
interest rates, but worries linger about the speed and
sustainability of economic recovery and their ability to prevent
the kind of debt trouble hurting other European states.
"We should prepare for a situation where the euro may
strengthen against the dollar and CEE currencies will fall,"
said one Warsaw-based dealer.
"The correlation (of the region's currencies) with the euro
has clearly been broken and our region may weaken further due to
the selling of risk."
By 1340 GMT the zloty <EURPLN=> led losses, falling 0.5
percent to the euro, while the Czech crown <EURCZK=> and
Hungary's forint <EURHUF=> fell 0.2 percent and 0.4 percent,
respectively.
The forint received a late boost against the euro in the
previous session from details of the government's economic
plans, but then resumed its downward slide and dealers said it
would likely continue. []
It fell to a fresh record low of 218.95 versus the Swiss
franc <CHFHUF=>, but trimmed some of its previous losses. Many
Hungarian households who have foreign currency loans, partly in
Swiss francs, now find it hard to repay. []
Romania's leu, which hit all-time lows against the euro
earlier this week, bucked the regional trend on Thursday to claw
back some ground following the central bank's decision to halt
its monetary policy easing cycle. []
Markets now expect the International Monetary Fund's board
to release the latest tranche of a 20 billion euro ($24.5
billion) bailout deal when it meets on Friday and so even a
positive review is unlikely to push the leu much higher,
analysts said.
"The leu did its falling recently," another Warsaw-based
dealer said, commenting on the unit's relative strength.
EXPORT BOOST
Surging exports helped manufacturing in the EU's biggest
emerging economies race ahead in June, but there were signs of a
slowdown in their western export markets that could weigh later
this year. []
The Purchasing Managers' Index for the region's biggest
economy Poland <PLPMI=ECI> rose to 53.3 points, its highest
level in almost three years, as producers recorded a jump in new
orders and sales abroad, data from Markit showed.
Poland's central bank kept interest rates unchanged on
Wednesday, as expected, but a more hawkish tone in its statement
as well as the weak zloty, which poses inflationary risks,
signalled rate rises may be closer than previously thought.
[]
The Czech central state budget gap widened to 75.7 billion
crowns from 95.4 billion in the previous month. The finance
ministry sees the overall public sector gap at 5.3 percent of
GDP but the ministry said this would require further savings.
The country's ministry plans to raise short-term treasury
bills issuance in the third quarter to a gross 75 billion
crowns, from 44 billion crowns in the second quarter.
The yield on a 39-week treasury bill jumped to 1.21 percent
from 1.05 percent at the last tender on June 3, hit by rising
supply worries for short paper in the coming months.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.703 25.654 -0.19% +2.39%
Polish zloty <EURPLN=> 4.143 4.122 -0.51% -0.94%
Hungarian forint <EURHUF=> 285.9 284.8 -0.38% -5.44%
Croatian kuna <EURHRK=> 7.194 7.194 0% +1.6%
Romanian leu <EURRON=> 4.334 4.361 +0.62% -2.23%
Serbian dinar <EURRSD=> 104.14 104.44 +0.29% -7.93%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -6 basis points to 123bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +140bps over bmk*
10-yr T-bond CZ9YT=RR -6 basis points to +144bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -11 basis points to +410bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +389bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +337bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -3 basis points to +625bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +600bps over bmk*
10-yr T-bond HU10YT=RR -3 basis points to +505bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1540 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Editing by Toby Chopra/Ruth
Pitchford))
