(Adds details, fixed income)
PRAGUE, Jan 29 (Reuters) - Poland's zloty weakened on
Thursday after 2008 growth data hinted at the extent of the
economic slowdown, while central Europe's currencies edged lower
as stocks fell.
Currencies have deepened their fall in January as economic
outlooks for the region darkened and central banks pushed ahead
with looser monetary policy, but have gained some traction in a
cautious upturn for global stocks and risk appetite this week.
The region's largest economy, Poland, grew 4.8 percent last
year, although it is slowing quickly in the global slump.
[]
"The data shows that the last three months of 2008 brought a
sharp slowdown, which supports the case for more interest rate
cuts," said Marta Petka-Zagajewska, economist at Raiffeisen
Bank.
The zloty <EURPLN=> was bid 0.6 percent down at 4.381 per
euro by 0950 GMT, and dealers said it has stuck to a tight range
since rebounding from a more than four-year low hit last week.
"The market gets heavy around the (weaker) level of the
range," said Jan Koprowski, dealer at BNP Paribas. "If stocks
continue their better performance it will support the zloty and
the region."
Central European stock exchanges traded around 1 percent
lower on Thursday after strong gains earlier in the week.
Data this month has pointed to a deeper than previously
thought slowdown for central Europe's export-reliant economies
as demand collapses in the struggling euro zone.
Poland cut interest rates more than expected to 4.25 percent
on Tuesday as it battles to stay out of recession.
In Hungary, already set for a recession in 2009, the forint
<EURHUF=> was lower at 286.7 to the euro.
Hungary should reshuffle around 1,000 billion forints' worth
of budget items by slashing personal income tax and employers'
social contributions to boost the economy, Prime Minister Ferenc
Gyurcsany said on Thursday. []
The Czech crown <EURCZK=> dipped 0.6 percent from
Wednesday's domestic close to 27.59 per euro, while the Romanian
leu <EURRON=> added 0.1 percent.
"Sentiment is fragile, and it is impossible to expect a
definitive turnaround to strengthening currencies," said Lubos
Mokras, analyst at Ceska Sporitelna bank.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.592 27.422 -0.62% -3.04%
Polish zloty <EURPLN=> 4.381 4.357 -0.55% -6.07%
Hungarian forint <EURHUF=> 286.7 285.84 -0.3% -8.07%
Croatian kuna <EURHRK=> 7.37 7.365 -0.07% -0.07%
Romanian leu <EURRON=> 4.231 4.236 +0.12% -5.12%
Serbian dinar <EURRSD=> 93.829 94.838 +1.08% -4.64%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +27 basis points to 110bps over bmk*
4-yr T-bond CZ4YT=RR -18 basis points to +88bps over bmk*
8-yr T-bond CZ8YT=RR -21 basis points to +111bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1053 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 Patrick Graham and Andy Bruce)
