CEE MARKETS 3-Forint leads FX gains; cbanks, Ireland in focus

                                
 * Poland seen raising rates first, followed by Hungary
                                
 * Timing of Polish rate hike seen pushed out
                                
 * Irish debt crisis weighs on shares
                                
 
                                
(Recasts, updates after Polish output data)
                                
 By Robert Mueller
                                
 PRAGUE, Nov 19 (Reuters) - A weaker dollar gave a gentle
boost to emerging European currencies on Friday as investors
digested data and comments from policymakers for pointers to
possible rate hikes, with Poland seen as first in the tightening
queue.
                                
 Shares were again held back, dropping to 1.2 percent by
market tensions stemming from uncertainty over how plans to
address Ireland's debt crisis will pan out, with Warsaw <.WIG20>
the biggest faller. [ID:nLDE6AI0QG]
                                
 With all eyes on events in the euro zone, news that China
had stepped up efforts to cool its economy by raising bank
reserve requirements for the second time in two weeks had little
impact. [ID:nL3E6MJ0N8]
                                
 By 1510 GMT, the Hungarian forint <EURHUF=> rose 0.3 percent
to 274.11 per euro to lead gains, helped by a stronger
euro/dollar cross, which the region typically tracks.
                                
 The Polish zloty <EURPLN=> was flat after October output
growth missed forecasts. The data was one of the last releases
before the central bank's two-day rate-setting meeting next week
and added to the majority view that rates would stay on hold.
                                
 "A weaker reading is not threatening as it is still at a
high level. In my opinion, Polish industry is doing well and we
see demand for Polish goods, both here and abroad," Millennium
Bank economist Urszula Krynska said.
                                
 "The data should have a limited impact on the MPC and backs
the view that the council will leave rates flat in November."
                                
 The market has scaled back bets that the 10-strong Polish
Monetary Policy Council will kick off a tightening cycle this
month after comments from policymakers suggested there may not
be majority support. [ID:nLDE6AE1R5]
                                
 A Reuters poll showed 10 of 18 analysts forecast no change
in the bank's main rate -- at a record low of 3.5 percent --
while the rest expected a 25 basis point rise. [ID:nLDE6AI0KV]
                                
 Analysts expect Poland to be the first to begin undoing two
years of easing of interest rates in central Europe to fight off
recession, with Hungary seen as second in line.
                                
 
                                
 HUNGARIAN INFLATION
                                
 A Hungarian central banker told Reuters late on Thursday
that the inflation report due out this month would provide
rate-setters with key clues about outlook changes, and said they
will act if the inflation target is threatened. [ID:nLDE6AI07N]
                                
 Wage growth picked up in Hungary in September, but not by
enough to influence monetary policy, analysts said. Markets will
be watching the central bank's assessment of new government
taxes and tax cuts, which it has already said look inflationary.
                                
 Yields on Hungarian bonds rose to 10-week highs earlier this
week and have stayed close to those levels as the market remains
vulnerable to developments in the euro zone debt markets.
                                
 The Czech crown <EURCZK=> dipped 0.3 percent in late trade
and the Romanian leu <EURRON=> was steady.
                                
 "It looks like some relief is coming into the region as the
dollar is back on a weak footing," a dealer in Prague said.
                                
 "Euro/dollar has been reversing up in last few sessions and
is set to see higher levels again. All this is helping regional
currencies to strengthen a bit."
                                
 
 --------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>   24.681   24.613  -0.28%    +6.63%
Polish zloty     <EURPLN=>    3.935    3.939  +0.1%     +4.29%
Hungarian forint <EURHUF=>  274.11   275.03   +0.34%    -1.37%
Croatian kuna    <EURHRK=>    7.395    7.394  -0.01%    -1.16%
Romanian leu     <EURRON=>    4.298    4.297  -0.02%    -1.41%
Serbian dinar    <EURRSD=>  106.59   106.85   +0.24%   -10.05%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -2 basis points to  66bps over bmk*
7-yr T-bond   CZ7YT=RR    -3 basis points to  +64bps over bmk*
10-yr T-bond   CZ9YT=RR    -2 basis points to  +91bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1613 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/Robert
Mueller, editing by John Stonestreet)