* FX, stocks mostly weaker
* Forint set for 2nd straight weekly gain
* Fiscal concerns to weigh on zloty
PRAGUE, Sept 24 (Reuters) - The zloty and forint dipped on
Friday after stock markets got off to a weak start, but the
Hungarian currency was set for a second straight weekly gain
after touching a five-week high earlier.
Currencies were also held back by the dollar's rise on talk
that Japanese authorities had intervened to stem gains for the
safe-haven yen. A Japanese government spokesman declined
comment.
Stock markets were mostly down, tracking west European
equities on persistent concerns about global economic recovery,
although Warsaw and Budapest clawed back some losses.
The forint <EURHUF=> slipped 0.2 percent but held around the
psychologically important 280 level to the euro and was near a 1
percent gain for the week, buoyed by news of large investments
in the auto sector and government pledges to cut the 2011
budget.
Markets were also looking to a central bank meeting on
Monday when analysts expect rates to stay flat but will be
watching for any signals the bank could rise rates later this
year. []
"I'm not sure the forint can stick around south of 280
(versus the euro) next week," a Budapest dealer said.
"It will be interesting to see what they say about inflation
pressures, growth prospects and the investment climate. That and
the usual global risk factors will set the tempo next week."
German car maker Audi AG <NSUG.DE> announced on Thursday it
would spend 900 million euros by 2013 to build a full-fledged
car factory in western Hungary. []
The news followed an announcement this week by General
Motors (GM) [] that it would invest 500 million euros to
expand capacity in Hungary.
Analysts say the return of foreign investors to Hungary will
support the forint, central Europe's worst performer this year.
Cheuvreux analyst Simon Quijano-Evans, in a morning note,
estimated the investments would total 2.5 percent of 2010 gross
domestic product.
ZLOTY WEAKNESS
The Polish zloty <EURPLN=> lost 0.25 percent and neared a
September low of 3.983 hit on Thursday. Selling could accelerate
if it breaks that level, dealers said. The Czech crown <EURCZK=>
and Romanian leu <EURRON=> were a touch higher.
Analysts expect the Polish currency to depreciate further
after news this week that Poland's general government deficit
will top 100 billion zlotys ($33.32 billion) this year, some 20
billion zlotys higher than previous forecasts. []
"The zloty wasn't even supported by minutes that raised
expectations for a quicker rate hike. The zloty may weaken more
dynamically further," analysts at BRE bank wrote in a note.
Minutes from the Polish central bank's August policy meeting
showed on Thursday that the Monetary Policy Council voted on a
50 basis point rate hike but the motion failed. The size of the
possible hike was larger than market players had originally
thought. []
The Czech central bank kept interest rates flat on Thursday
as expected and stuck to its outlook for stable policy although
one board member advocated a rate hike, the first call for
tighter policy in more than two years. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.584 24.598 +0.06% +7.05%
Polish zloty <EURPLN=> 3.977 3.967 -0.25% +3.19%
Hungarian forint <EURHUF=> 280.08 279.55 -0.19% -3.47%
Croatian kuna <EURHRK=> 7.291 7.287 -0.05% +0.25%
Romanian leu <EURRON=> 4.253 4.259 +0.14% -0.37%
Serbian dinar <EURRSD=> 105.48 105.307 -0.16% -9.1%
All data taken from Reuters at 0944 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Susan Fenton)
