* Forint recovers, shrugs off Moody's downgrade of banks
* Reaction to Romanian budget approval muted
* Impact of euro zone woes on CEE currencies eases for now
WARSAW, Dec 7 (Reuters) - Emerging European currencies were
mostly flat on Tuesday but the Hungarian forint rebounded as
investors shrugged off a Moody's downgrade of the country's
banks and awaited a parliamentary vote on Budapest's budget
targets for 2011.
The forint <EURHUF=> picked up after sliding 1 percent on
Monday after Moody's cut Hungary's credit rating to just above
"junk" grade, citing concerns about its public finances.
Hungarian lawmakers will vote on key targets in the 2011
budget later on Tuesday. The Economy Ministry's state secretary
told parliament that targets for next year would ensure that the
deficit would come in below the European Union limit of 3
percent of GDP. []
"It seems that we're not the story after all," one
Budapest-based dealer said.
"Investors ... returned to business. We'll watch the EUR/USD
cross, as on all quiet days, and probably strengthen to about
278 to the euro."
Moody's also cut its ratings on Hungary's banks on Tuesday
[], but the move had limited impact on the currency
in early trade, although it did push shares of the country's
largest bank OTP <OTPB.BU> down 0.2 percent.
By 0855 GMT the forint was 0.3 percent stronger versus the
euro. The Czech crown <EURCZK=> and the Polish zloty <EURPLN=>
each fell 0.1 percent, while Romania's leu <EURRON=> was up 0.1
percent.
The region's currencies have been hit recently by worries
over possible contagion in the euro zone crisis, but analysts
said this effect seems to have abated for now.
"Of course it is not the euro zone crisis itself that is
fading, but it looks like its impact on the region seems to be
weaker now," said Ulrich Leuchtmann, analyst at Commerzbank in
Frankfurt.
In Romania, the coalition government on Monday approved a
cost-cutting budget for next year, a move that should allow
Bucharest to keep its IMF-led aid package on track.
The government took additional measures to boost its
revenues by deciding to collect health insurance taxes from most
pensioners and to cut spending by halving maternity leave to a
year.
Dealers said market reaction to the budget approval was
subdued as it still needs to clear parliament, where the
government holds a fragile majority and budget talks are usually
extended.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.018 25.005 -0.05% +5.2%
Polish zloty <EURPLN=> 4.018 4.014 -0.1% +2.14%
Hungarian forint <EURHUF=> 279.15 279.9 +0.27% -3.15%
Croatian kuna <EURHRK=> 7.373 7.372 -0.01% -0.87%
Romanian leu <EURRON=> 4.302 4.308 +0.14% -1.5%
Serbian dinar <EURRSD=> 106.97 107.1 +0.12% -10.37%
All data taken from Reuters at 0955 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 Susan Fenton)
