* German Ifo lifts, U.S. GDP weakens CEE fx
* Rate expectations keep crown under pressure
* Leu bucks trend, awaiting new presidential election round
(Recasts)
Dagmara Leszkowicz and Sandor Peto
WARSAW/BUDAPEST, Nov 24 (Reuters) - Central Europe's main
currencies eased on Tuesday as mixed signals from the pace of
global recovery coupled with the prospect of possible further
monetary easing in the recession-hit region.
The business climate index of Germany's Ifo think tank rose
to levels before the collapse of U.S. bank Lehman Brothers in
2008 [], giving support to the currencies of
Central Europe whose main export market is Germany.
But annual third-quarter U.S. economic growth came at 2.8
percent, below an earlier 3.5 percent estimate [],
knocking down shares and other risky assets.
The region's currencies have gained this month, led by the
zloty of Poland, the only economy in the region which has
escaped deep recession, but the units gave up some ground last
week, led by the Czech crown <EURCZK=>.
Analysts said mixed data from major economies maintained
short-term uncertainty over the pace of recovery, and dollar
weakness in the future may not always be the signal of higher
risk appetite as it often was in the past month.
"This makes us wary of renewed pullbacks in risk appetite in
the days ahead," Citibank said in a note on currency markets.
The crown shed 0.6 percent against the euro by 1529 GMT,
touching three-week lows past 26 per euro as its falls triggered
stop-loss deals in low liquidity. The zloty<EURPLN=> and the
forint <EURHUF=> both eased 0.2 percent.
"People do not want to open positions before the year-end,
they only cover what they have to," one Budapest-based currency
dealer said.
RATES, POLITICS EYED
Hungary's central bank cut interest rates by 50 basis points
to 6.5 percent on Monday and signalled further easing to help
the economy which is seen contracting by about 6.5 percent this
year <HUGDP1>.
Czech interest rates are much lower at an all-time low of
1.25 percent, and the crown has underperformed regional peers in
the past weeks with the possibility that central bank interest
rates could move even lower again.
The bank voted 4-3 this month to leave interest rates flat,
the second meeting in a row at which board chief Zdenek Tuma and
his deputy were outvoted. Last week Vice-Governor Miroslav
Singer said again he would welcome looser monetary conditions.
"Not only regional selling (has weighed on the crown), but
another comment from Singer last week. This has contributed to
(underperformance)," said Martin Lobotka, analyst with Ceska
Sporitelna.
In Poland the central bank is expected to leave rates on hold
at its monthly policy meeting that ends on Wednesday. Interest
rates are expected to remain flat until at least mid-2010.
The leu <EURRON=> edged up 0.1 percent to 4.265 per euro, to
reach its highest since Oct 7 as investors were awaiting results
of a second round of a presidential election.
"The first round of election is over. This is a good thing
and the region is doing pretty well," one Bucharest dealer said.
"Investors are happy that the leu has a good carry and
political turmoil is close to an end, whatever the end is...
Whoever will form the next government, I think will do whatever
has to be done in terms of spending cuts," the dealer added.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.014 25.862 -0.58% +2.84%
Polish zloty <EURPLN=> 4.131 4.121 -0.24% -0.39%
Hungarian forint <EURHUF=> 268.15 267.67 -0.18% -1.72%
Croatian kuna <EURHRK=> 7.313 7.31 -0.04% +0.71%
Romanian leu <EURRON=> 4.265 4.27 +0.12% -5.88%
Serbian dinar <EURRSD=> 94.353 94.22 -0.14% -5.16%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -11 basis points to 101bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +112bps over bmk*
10-yr T-bond CZ10YT=RR +1 basis points to +95bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +4 basis points to +359bps over bmk*
5-yr T-bond PL5YT=RR +5 basis points to +329bps over bmk*
10-yr T-bond PL10YT=RR +3 basis points to +289bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +518bps over bmk*
5-yr T-bond HU5YT=RR +5 basis points to +475bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +410bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1629 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus,writing by Dagmara
Leszkowicz/Sandor Peto, editing by Stephen Nisbet)
((dagmara.leszkowicz@thomsonreuters.com, RM:
dagmara.leszkowicz.reuters.com@reuters.net, tel +48 22 653 9718))
