* Dealers says Poland's BGK selling euros in market
* Zloty set for strong April gains, other FX near highs
* Romania keeps 2015 euro target, leu stays near 13-mth high
* Turnover thin as London markets closed
(Updates throughout)
By Sandor Peto and Jason Hovet
BUDAPEST/PRAGUE, April 29 (Reuters) - The Polish zloty rose
on Friday on reports a state-owned bank was selling euros in the
market, and was headed for its best monthly gain since July as
emerging European currencies mostly firmed.
The weakening dollar has boosted investors' appetite for
higher-yielding assets, and central Europe's currencies have
traded near new highs since the U.S. Federal Reserve maintained
its ultra-loose policy this week.
The zloty <EURPLN=> rose 0.2 percent to 3.932 against the
euro by 1348 GMT and was set to finish April with a 2.5 percent
gain.
The Polish currency has been helped by Finance Ministry
plans to regularly sell some of the funds it receives from the
European Union on the spot market under a plan to support the
zloty. []
Dealers said Poland's state-owned bank BGK, which can sell
euros on behalf of the finance ministry but is also able to do
its own transactions, was seen on the spot market on Friday.
[]
BGK declined to comment and it was not clear whether the
bank was acting on its own account or for the finance ministry.
"Any presence of BGK in the coming weeks will raise
speculation as to whether it's the finance ministry or just BGK
as a regular market player," said one Warsaw-based dealer.
The Hungarian forint <EURHUF=> and the Romanian leu
<EURRON=> were up 0.1 percent at 264.08 and 4.074 to the euro,
respectively. The Czech crown <EURCZK=> eased a quarter of a
percent.
Activity was slightly muted with London markets closed for
the royal wedding. Hungarian government bonds were a shade
firmer from Thursday but turnover was very low.
The region's stock markets fell by up to 1 percent.
CARRY TRADE ATTRACTIVE
Romania's centrist coalition government maintained its 2015
euro adoption goal in its euro convergence programme approved on
Friday, knocking down reports this week that it would drop the
date. []
Romania, a European Union member since 2007, had the fastest
growth rate in the bloc until a real estate and credit bubble
burst in 2008 forcing it to seek IMF-led aid as it fell into
recession. Analysts have suggested the 2015 target was overly
optimistic.
An International Monetary Fund team started a review of
Romania's new two-year aid deal on Wednesday that will continue
through May 9. It is widely expected to note Romania's progress
in meeting fiscal deficit targets. []
The leu was trading at around a 13-month high and the forint
stayed near its highest in a year.
The forint has been emerging Europe's best performing
currency this year, followed by the leu and the crown. The
zloty's April gains helped erase losses seen since the start of
2011.
The crown, a funding currency in the region due to low Czech
interest rates, stayed near a 2-1/2 month high it hit this week.
Markets were looking to a central bank policy meeting next week,
with rates seen staying where they have been since May 2010.
In Hungary, investors are attracted by high interest rates
-- at 6 percent <NBHI> -- and continued optimism on Budapest's
fiscal plans, which they hope will keep the budget deficit below
3 percent of GDP in coming years after an expected surplus this
year due to big one-off revenues.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.153 24.093 -0.25% +3.51%
Polish zloty <EURPLN=> 3.932 3.939 +0.18% +0.66%
Hungarian forint <EURHUF=> 264.08 264.28 +0.08% +5.26%
Croatian kuna <EURHRK=> 7.362 7.359 -0.04% +0.24%
Romanian leu <EURRON=> 4.074 4.078 +0.1% +3.9%
Serbian dinar <EURRSD=> 98.967 99.44 +0.48% +7.03%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -1 basis points to -16bps over bmk*
7-yr T-bond CZ7YT=RR +3 basis points to +46bps over bmk*
10-yr T-bond CZ9YT=RR +6 basis points to +73bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -2 basis points to +441bps over bmk*
5-yr T-bond HU5YT=RR -7 basis points to +413bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +373bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1600 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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 [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus; Writing by Krisztina
Than/Sandor Peto/Jason Hovet; editing by John Stonestreet and
Susan Fenton)
