CEE MARKETS 3-FX up in technical trade, resists dollar strength

                                
  (Updates throughout, changes dateline)
                                
 BUDAPEST, Sept 9 (Reuters) - Central European currencies
gained late on Tuesday, breaking through key technical levels
which helped offset fresh gains for the U.S. dollar.
                                
 The Hungarian forint <EURHUF=> led a recovery from late
Monday's decline to firm 0.7 percent and break through a key
psychological level at 240 versus the euro.
                                
 "We saw a reversal of yesterday's trend and the forint hit a
high of 238.50," a Budapest-based currency dealer said.
                                
 "Today's session was not quite as hectic as yesterday's, but
moves are still mainly a function of the euro/dollar."
                                
 Dollar strength tends to harm the region's emerging
currencies as investors switch into higher-rated dollar assets.
                                
 Gains in the forint also boosted Hungarian government bonds,
with yields falling by up to 10 basis points across the curve.
                                
 "On the whole, the medium segment is strongest, the
five-year maturity sparked very strong buying interest which
then served as a starting point for further price gains," a
fixed income trader said.
                                
 "We saw a London name buying heavily into the five-year
segment after the forint peeked below 240, that was followed up
by a big fall in yields," the trader said.
                                
 The Czech crown <EURCZK=> also strengthened, with large euro
selling orders helping it to bounce back from Monday's
three-month low.
                                
 The currency rebounded after nearing the key 25.00 level,
where its found support from exporters, dealers said.
                                
 Analysts say the crown will likely weaken past 25 per euro
later in the year when it becomes clearer when another interest
rate cut will be delivered.
                                
 "The Czech national bank is moving carefully on further
interest rate cuts as (a faster) depreciating currency could
threaten achieving the inflation target in 2009," said Jaromir
Sindel, chief economist at Citibank in Prague.
                                
 At 1300 GMT Romania's leu <EURRON=> traded at 3.5835/84 per
euro <EURRON=>, traded in similar ranges to the previous session
on Tuesday.
                                
 Poland's zloty <EURPLN=> was marginally stronger at 3.462
against the euro but dealers said a switch in investors'
concerns from the health of the U.S. financial sector to
economic prospects in Europe could bode badly.
                                
 "It seems that the crisis on financial markets which started
in the U.S. is weighing more on the European economy than on the
U.S. economy and therefore our region will be seen more
negatively than it was," said Sylwester Brzeczkowski a trader at
ABN Amro in Warsaw.
                                
 The Croatian kuna <EURHRK=> and Serbia's dinar <EURRSD=>
were broadly unchanged.
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2008 
Czech crown      <EURCZK=>   24.832   24.925  +0.37%   +6.28%
Polish zloty     <EURPLN=>    3.462    3.468  +0.17%   +3.85%
Hungarian forint <EURHUF=>  239.650  241.440  +0.74%   +5.22%
Croatian kuna    <EURHRK=>    7.131    7.131   0%      +2.67%
Romanian leu     <EURRON=>    3.586    3.589  +0.08%   -0.16%
Serbian dinar    <EURRSD=>   76.420   76.551  +0.17%   +2.97%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR   +4 basis points to  9bps over bmk*
5-yr T-bond   CZ5YT=RR   +1 basis points to  +27bps over bmk*
10-yr T-bond   CZ9YT=RR   +13 basis points to  +46bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -1 basis points to  +231bps over bmk*
5-yr T-bond   PL5YT=RR    0 basis points to  +221bps over bmk*
10-yr T-bond PL10YT=RR    0 basis points to  +196bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -11 basis points to  +513bps over bmk*
5-yr T-bond   HU5YT=RR    -12 basis points to  +466bps over bmk*
10-yr T-bond   HU10YT=RR  -7 basis points to  +405bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1526 CET.
Currency percent change calculated from the daily domestic 
close at 1500 GMT.

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(Reporting by Reuters bureaus, writing by Gergely Szakacs)