(Updates throughout, changes dateline.)
BUDAPEST, Sept 4 (Reuters) - Central European currencies
gave up early gains on Thursday, hit by the dollar's surge
against the euro, the region's reference currency, and the
European Central Bank's comments on growth and inflation.
"The dollar's <EUR=> gains wiped out profits in the region,"
said David Sykora, a trader at CSOB bank in Prague.
"Sentiment was hurt by comments from (ECB President
Jean-Claude) Trichet pointing to a euro zone economy slowing
down."
The Czech crown <EURCZK=> eased 0.14 percent against the
euro to 24.86 by 1459 GMT.
The forint <EURHUF=>, which has been the region's most
volatile unit for weeks, again led the falls as late dollar
gains against the euro pushed the exchange rate through key
resistance levels at around 240 forints against the euro.
It hit 11-week lows at 241.55 versus the euro and traded at
241.35 at 1459 GMT, 1.16 percent weaker than Wednesday. Dealers
said its next target was 242.
"Sizeable stop-loss deals were triggered at several levels
near 240... the dollar is firming and that weakens the whole
region," one dealer in Budapest said.
Dealers said uncertainty over parliamentary support for the
minority government's budget plans maintained risks to asset
prices in Hungary and a fall by Poland's zloty <EURPLN=> earlier
in the day also contributed to the forint's late slump.
The zloty shed 0.92 percent against the euro by late trade
and was bid at 3.397. It was undermined after the ECB on
Thursday said euro zone inflation would not ease back to the ECB
target until 2010.
"The zloty loses as interest rate disparity expectations
dwindle. The ECB, which left interest rates unchanged, shows it
is determined to fight inflation," said Jakub Borowski, chief
economist at Invest Bank in Warsaw.
"I would expect the zloty to stabilise at 3.40 against the
euro, as the (Polish Monetary Policy) council raises interest
rates one more time this year," he added. The Polish central
bank's key rate is at 6.0 percent.
The region's currencies, which hit record highs in the
summer, have retreated in the past weeks as a slowdown in growth
overshadowed earlier rate hike expectations and because of
concern about the possible impact of the Russia-Georgia
conflict.
Hungary will on Friday publish detailed second-quarter
economic growth data and July industrial output figures.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.86 24.825 -0.14% +6.18%
Polish zloty <EURPLN=> 3.397 3.366 -0.92% +5.65%
Hungarian forint <EURHUF=> 241.35 238.59 -1.16% +4.55%
Croatian kuna <EURHRK=> 7.136 7.152 +0.22% +2.6%
Romanian leu <EURRON=> 3.577 3.535 -1.19% +0.09%
Serbian dinar <EURRSD=> 76.76 76.9 +0.18% +2.54%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +8 basis points to +8bps over bmk*
5-yr T-bond CZ5YT=RR -6 basis points to +13bps over bmk*
10-yr T-bond CZ9YT=RR -6 basis points to +36bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +7 basis points to +518bps over bmk*
5-yr T-bond HU5YT=RR -4 basis points to +474bps over bmk*
10-yr T-bond HU10YT=RR +10 basis points to +396bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1659 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Editing by Swaha Pattanaik)
