PRAGUE, Nov 29 (Reuters) - Emerging European currencies
edged up on Monday after an Irish rescue deal brought some
relief to the region but failed to stem fears over further
fallout from the euro zone's debt crisis.
The euro zone's battle with debt on its periphery has hurt
central Europe's reference currency, the euro, and shone a
spotlight on the region's efforts to reassure investors over its
own fiscal position, with Hungary at the sharp end.
Hungarian stocks, bonds and the forint fell sharply on
Friday as government plans to change the pension system to help
shore up the budget unnerved investors and raised the chances of
an interest rate hike when the central bank meets on Monday.
The pension reform was Hungary's centre-right government's
latest controversial policy move since taking power a half year
ago.
"The currencies of Hungary, Poland and Romania -- all
(facing) ... an uncertain budget outlook -- are coming under
increasing pressure," Commerzbank said.
"The Czech Republic on the other hand boasts solid national
finances and as a result the (crown) is comparatively solid."
By 0842 GMT, the forint <EURHUF=> rose 0.2 percent to hold
on the strong side of 280 to the euro, and the Polish zloty
<EURPLN=> added 0.2 percent but stayed above the 4.0 per euro
level. The Romanian leu <EURRON=> bounced half a percent from a
one month low. The Czech crown <EURCZK=> was steady at 24.715.
Dealers said they expected a steady forint before Monday
afternoon's interest rate decision and anticipate hawkish
comments from the central bank.
A Nov 22-24 Reuters poll showed 20 out of 21 analysts
expected the bank (NBH) to keep rates at a record low of 5.25
percent. One forecast a 25 basis point rise. []
The zloty's break above the 4.0 level last week sent it to a
four-month low and broke through technical levels. Further
depreciation could put pressure on Poland's debt, breaking
thresholds that would trigger harsh spending cuts.
The currency is still seen trading around an area described
as 'safe' by Polish policymakers but analysts said it was facing
more pressure.
"The technical picture remains negative," SEB said. It said
more deterioration could prompt the finance ministry to
intervene against losses like it did in May, when the zloty
moved into the 4.17 to 4.20 range.
"It has muscles and an also strong motive to prevent further
zloty losses since that increases foreign debt measured in PLN
and thereby increases the public debt to GDP."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.715 24.733 +0.07% +6.49%
Polish zloty <EURPLN=> 4.022 4.028 +0.15% +2.04%
Hungarian forint <EURHUF=> 279.82 280.33 +0.18% -3.38%
Croatian kuna <EURHRK=> 7.426 7.427 +0.01% -1.57%
Romanian leu <EURRON=> 4.288 4.313 +0.58% -1.18%
Serbian dinar <EURRSD=> 107.21 106.91 -0.28% -10.57%
All data taken from Reuters at 0942 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet;
Editing by John Stonestreet)
