BUDAPEST, Aug 19 (Reuters) - Eastern Europe's currencies
were a touch weaker on Thursday, edging back from recent gains
as dealers waited for direction from global markets and eyed a
Romanian bond sale.
Traders said they expected the units would trade in tight
ranges through the day.
After a strong Czech bond auction on Wednesday, Romania is
due to tender 300 million lei of 5-year treasury bonds later on
Thursday. Analysts said Romania's finance ministry would likely
reject all bids if it sticks to its self-imposed yield cap of 7
percent.
"I don't think they will give up on this tactic soon," one
trader said. "They can't really afford to keep going like that.
But if the central bank helps them and keeps (interbank) rates
low, they will continue to borrow short-term."
"Nobody will finance them (with maturities) over a year (at
7 percent), so I don't think they will sell anything today," the
trader added.
In the Czech Republic the strong bond auction results on
Wednesday gave some support to the crown <EURCZK=>.
Czech bond yields have dropped to lifetime lows on the long
end, with investors bidding for more than twice the amount on
offer at a Czech 15-year bond auction on Wednesday as markets
anticipate lower supply of longer maturities ahead.
At 0800 GMT the crown was 0.2 percent lower, the Polish
zloty <EURPLN=> was down 0.3 percent and the Hungarian forint
<EURHUF=> was 0.1 percent lower at 277.33 to the euro. The
Romanian leu <EURRON=> was up 0.2 percent.
Dealers said the region's currencies were likely to take
clues from global markets on Thursday and the euro/dollar cross.
"If the dollar strengthens again to the euro, the zloty may
go to 3.96," analysts at Citibank Handlowy wrote in a note.
The zloty has strengthened recently supported by a strong
appetite of foreign investors for the country's debt.
Hungarian wages data which showed that gross average wages
<HUWAGE=ECI> rose by an annual 0.5 percent in June after a
revised drop of 0.8 percent in May did not cause any surprise
and did not have significant market impact.[]
"I expect the forint to be roughly steady today, hovering
between 276.50 and 278 versus the euro," a dealer in Budapest
added.
Hungary will auction 12-month discount Treasury bills later
on Thursday. <HUISSUE>
Hungarian government bonds have rallied in the past days as
a large bond expiry next week fuels demand, mainly from local
investors, traders have said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.8 24.752 -0.19% +6.12%
Polish zloty <EURPLN=> 3.952 3.939 -0.33% +3.85%
Hungarian forint <EURHUF=> 277.33 277.07 -0.09% -2.52%
Croatian kuna <EURHRK=> 7.27 7.27 0% +0.54%
Romanian leu <EURRON=> 4.221 4.228 +0.17% +0.39%
Serbian dinar <EURRSD=> 104.53 104.52 -0.01% -8.28%
All data taken from Reuters at 1000 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus)
(Reporting by Krisztina Than, editing by Andrew Heavens)
