CEE MARKETS 1-FX regain ground as crown shrugs off politics

                                
 PRAGUE, Sept 3 (Reuters) - Central European currencies
firmed on Thursday, gaining back previous losses on the back of
stronger emerging equity markets, while the Czech crown shook
off political worries.
Czech leaders agreed on Wednesday to push for an election at
the earliest possible date by preparing constitutional changes,
working around a court injunction this week to study the
legality of early polls set for Oct. 9-10. [ID:nL257978]
                                
 "All a bit of a mess but we do see an agreement being
reached...," Cheuvreux economist Simon Quijano-Evans said in a
Thursday note.
                                
 "...It boils down to the fact that the Constitution doesn't
allow for parliament to dissolve itself, something that all
parties appear to be agreeing to change very soon, enabling an
election this year."
                                
 The crown <EURCZK=> edged up 0.2 percent to 25.66 to the
euro, while the Polish zloty <EURPLN=> led gains with a 0.6
percent rise to bid at 4.136 to the euro and Hungary's forint
<EURRON=> added 0.2 percent. Romania's leu <EURRON=> was steady
at 4.238 to the euro.
                                
 Central European bourses opened 1-2 percent stronger on
Thursday after losses of more than 3 percent in the previous
session, tracking Asian markets higher.
                                
 Analysts said a stronger euro/dollar, a reference rate for
the region, set markets up for a small recovery.
                                
 "The forint rebounded from a peak of 276.50 yesterday to
274.60. The Dow did not fall too heavily, Asia is performing
quite well so sentiment is not as gloomy as yesterday," a
Budapest-based currency dealer said.
                                
 "I think however the proper range is 275/277," he said.
                                
 Markets have started questioning a summer rally that pushed
regional bourses to double digit gains, and the zloty 7 percent
higher to lead currencies. Dealers say lower liquidity in the
market has exaggerated price moves.
                                
 Improving economic outlooks in the euro zone have lifted
prospects of recovery for export-dependent Central Europe,
although analysts warn the path back will be slow and the region
is still grappling with rising unemployment and budget deficits.
                                
 A Reuters poll on Wednesday showed currencies roughly steady
over the next three months, with only the zloty -- backed by
Poland's stronger economy -- the only outperformer.
<CEEFXPOLL02> [ID:nL2538084]
                                
 Polish deputy finance minister Dominik Radziwill said late
on Wednesday this year's budget gap will be a few billion zlotys
lower than the planned 27.2 billion. Officials have estimated
next year's shortfall would be wider. [ID:nL2155941]
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   25.661   25.707  +0.18%    +4.26%
Polish zloty     <EURPLN=>    4.136    4.16   +0.58%    -0.51%
Hungarian forint <EURHUF=>  274.7    275.35   +0.24%    -4.06%
Croatian kuna    <EURHRK=>    7.344    7.341  -0.04%    +0.29%
Romanian leu     <EURRON=>    4.238    4.239  +0.02%    -5.28%
Serbian dinar    <EURRSD=>   93.24    92.98   -0.28%    -4.03%
All data taken from Reuters at 0923 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 [EMRG]
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 [CEN]  Economic Data Guide <ECONGUIDE> 
Official rates [GLOBAL/INT]  Emerging Diary [EMRG/DIARY] 
Top events [M/DIARY]  Diaries [DIARY] Diaries Index [IND/DIARY] 
 (Reporting by Reuters bureaus, writing by Jason Hovet)