(Repeats story published late on Tuesday)
BUDAPEST, Nov 4 (Reuters) - Emerging European currencies
firmed on Tuesday as appetite for risk rose in global markets
ahead of the presidential election in the United States.
The U.S. dollar <EUR=> eased and equity markets in Europe
and the United States rose.
While a victory by Democrat Barack Obama at the U.S.
elections may lift the dollar, assets in emerging markets can
rise after U.S. citizens vote in a new president, dealers said.
"Apart from the dollar, the impact should be viewed
globally: risk trades will be bought," one currency dealer in
Budapest said.
At 1403 GMT the Czech crown<EURCZK=> was firmer by 0.61
percent at 24.11 against the euro, the Polish zloty<EURPLN=>
gained 0.59 percent to 3.531, while Hungary's forint<EURHUF=>
strengthened by 0.44 percent to 260.35.
The Reserve Bank of Australia cut rates by 75 basis points
on Tuesday, and other central banks which will meet later this
week, including the Czech bank and the European Central Bank,
are seen joining the global trend of monetary easing.
Activity in the Czech crown's market was muted ahead of the
central bank's policy meeting on Nov. 6 where it is expected to
cut rates by either 25 or 50 basis points.
"I think they have plenty of reasons to cut 50 bps, but they
might just be waiting for more data next month," said Dalimil
Vyskovsky, a fixed-income trader at Komercni Banka in Prague.
Hungarian and Romanian dealers said trading was slow ahead
of the U.S. vote. Romania's leu, driven by commercial orders,
moved sideways and was weaker by 0.11 percent from Monday at
1403 GMT, at 3.678 to the euro.
The region's markets were smacked last month as the
year-long financial crisis spilled over into the region, pushing
Hungary to seek aid from the International Monetary Fund and the
European Union to ease concerns over its external financing.
Serbia followed that move on Monday and sought a loan from
the IMF to strengthen its budget, officials said [].
The dinar <EURRSD=> weakened by 0.88 percent to 84.950 per euro
on Tuesday.
Government bond markets in the region continued to
consolidate after price falls last month.
Czech market rates continued an easing seen in the past few
weeks, while bond activity started to pick up.
"There's some trading on brokers; there's some interest from
domestic accounts to buy bonds because they seem to be cheap,"
Komercni's Vyskovsky said.
Hungary sold three-month Treasury bills of 30 billion
forints, the full offered amount, on Tuesday following several
auctions which were cut or cancelled in the past weeks.
Yields dropped and a cut in government bond issuance and the
central bank's (NBH) auctions to buy bonds may help end heavy
selling by foreigners who offloaded Hungarian government bonds
worth almost 700 billion Hungarian forints since
mid-September<.HUBONDHOLD>, traders said.
"The selling pressure has eased," one trader said. "But as
long as the NBH base rate remains 11.5 percent, I don't think
that yields could go further down by more than 50 or 100 basis
points... sellers would appear at those levels."
Dealers and analysts said Hungary needed to resolve the
problem of its high state debt and carry out economic reforms.
[].
"It's fine that we get money from the IMF, but if we use it,
we will need to pay it back, won't we?" one currency dealer
said.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.110 24.257 +0.61% +9.01%
Polish zloty <EURPLN=> 3.531 3.552 +0.59% +1.93%
Hungarian forint <EURHUF=> 260.350 261.510 +0.44% -2.97%
Croatian kuna <EURHRK=> 7.150 7.158 +0.11% +2.41%
Romanian leu <EURRON=> 3.678 3.674 -0.11% -2.73%
Serbian dinar <EURRSD=> 84.950 84.207 -0.88% -7.86%
All data taken from Reuters at 1503 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -11 basis points to 162bps over bmk*
5-yr T-bond CZ5YT=RR -3 basis points to +160bps over bmk*
10-yr T-bond CZ9YT=RR +10 basis points to +125bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -40 basis points to +975bps over bmk*
5-yr T-bond HU5YT=RR -48 basis points to +905bps over bmk*
10-yr T-bond HU10YT=RR +9 basis points to +556bps over bmk*
*Benchmark is German bond equivalent.
(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz/Sandor Peto; editing by David Stamp/Tony Austin)
