WARSAW, May 26 (Reuters) - Hungary's forint led losses in
central Europe on Tuesday, with signs dimming for a quick
economic recovery in the region after Germany posted a record
quarterly drop in the first quarter.
Asian stocks also dropped, pointing to a weaker tone for
global risk appetite and emerging markets, after North Korea
said it had fired new missiles, adding to tensions at a time
when markets are questioning recent optimism. []
At 0708 GMT, Hungary's forint <EURHUF=> was 0.6 percent
weaker against the euro to bid at 281.46, while Poland's zloty
<EURPLN=> had lost half a percentage point to the common
currency.
"If the biggest eurozone economy recovers more slowly than
previously expected, the same will happen with CEE economies,"
Commerzbank analyst Ulrich Leuchtmann wrote in a morning report.
Confirming preliminary estimates from earlier this month,
the German stats office said gross domestic product shrank 3.8
percent quarter-on-quarter and 6.7 percent year-on-year during
the January-March period. []
Central Europe's export-driven economies have suffered from
a fall in demand from western European markets, most notably
Germany.
Emerging European bourses were mixed with Bucharest dropping
1 percent while Budapest added nearly 1 percent.
In Hungary, the central bank said on Monday it expects the
country's economy to contract by 6.7 percent and could recover
by 2011, while keeping interest rates on hold.
"There's no more good news out so investors are getting
cautious with emerging (markets). This recent optimism could be
kept up only by more and more good news," a Budapest-based
currency dealer said.
In Poland, the stats office releases official GDP figure for
the first quarter on May 29. Analysts polled by Reuters expect
the country's economy to expand by just 1 percent -- far below
the rates of recent years.
The Czech crown <EURCZK=> also edged lower pulled by the
region and dealers said the currency is also weighed by the
country's budget worries.
The Czech Finance Ministry expects budget deficits to stay
above the 3 percent of gross domestic product ceiling set by the
European Union until 2012, keeping the Czech Republic out of the
euro zone for years to come. []
"We are mainly moving with the region, but it is certainly
not good news what they are doing with the budget," said one
dealer. "If you look at outlooks of central bank and the
government, the crown exchange rate should be going up
(weaker)."
In Romania the leu <EURRON=> was also slightly down, traded
at 4.172 against the single currency.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.724 26.66 -0.24% +0.11%
Polish zloty <EURPLN=> 4.43 4.407 -0.52% -7.11%
Hungarian forint <EURHUF=> 281.46 279.83 -0.58% -6.36%
Croatian kuna <EURHRK=> 7.28 7.301 +0.29% +1.17%
Romanian leu <EURRON=> 4.172 4.167 -0.12% -3.78%
Serbian dinar <EURRSD=> 94.263 94.273 +0.01% -5.07%
*Benchmark is German bond equivalent.
All data taken from Reuters at 0808 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; editing by Patrick Graham)
