BUDAPEST, July 12 (Reuters) - Central European currencies
were little changed early on Monday, tracking moves on
international markets as inflation data from the region met
expectations.
The euro fell <EUR=>, and falls in what is the region's
reference currency often signal increased risk aversion, which
is negative for asset prices in the European Union's emerging
markets.
Poland's zloty <EURPLN=> eased 0.15 percent against the euro
by 0713 GMT to 4.075, Romania's leu <EURRON=> shed 0.1 percent,
while the Hungarian forint <EURHUF=> and the Czech crown
<EURCZK=> were flat versus the euro.
The forint hovered near the key 280 line which it broke
through last week when the region's currencies firmed 1-2
percent, regaining part of the ground lost over the previous
weeks.
"The euro/dollar is stuck between 1.2570 and 1.26. If the
euro falls through that support, the forint can also weaken,"
one Budapest-based dealer said.
The region's main stock indices dropped, led by Budapest's
<> -- a strong gainer in the past two weeks -- which fell
0.6 percent.
FLAT INFLATION RATES
Romania released data showing inflation rose 4.4 percent in
June, in line with expectations. A value-added tax hike is seen
boosting inflation later this year, fuelling some expectations
for a central bank interest rate hike. []
Analysts expect Romania to continue to struggle to sell its
debt after the finance ministry rejected all bids at a tender on
Thursday. []
The ministry has scheduled a tender of 1-year treasury bills
on Monday, planning to sell 750 million lei, and markets are
keenly watching to see if it will accept yields above a
self-imposed cap of 7 percent.
Czech inflation was 1.2 percent in June, marginally below
forecasts. []
"We keep our positive view on the CZK, thanks to improving
fundamentals and positive expectations associated with the new
centre-reform-minded government, which will be named on July
13," Komercni Banka said.
"The main risks to our bullish scenario are external
factors, particularly risk aversion and the scenario with double
dip in the euro area. Technical analysis indicates an optimistic
outlook."
Three Czech parties building a centre-right coalition
wrapped up six weeks of talks on Friday and should sign an
agreement for a new government on Monday, before being sworn in
on Tuesday. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.282 25.29 +0.03% +4.1%
Polish zloty <EURPLN=> 4.075 4.069 -0.15% +0.71%
Hungarian forint <EURHUF=> 279.35 279.28 -0.03% -3.22%
Croatian kuna <EURHRK=> 7.202 7.181 -0.29% +1.49%
Romanian leu <EURRON=> 4.239 4.233 -0.14% -0.04%
Serbian dinar <EURRSD=> 103.86 103.727 -0.13% -7.68%
All data taken from Reuters at 0913 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Sandor Peto)
(Reporting by Sandor Peto; editing by John Stonestreet)
