BUDAPEST, Oct 11 (Reuters) - Emerging European currencies
were mixed on Monday with the Czech crown, the region's top
performer this year, trading flat as the central bank indicated
it was not planning to intervene to curb the currency.
Currencies were expected to trade in tight ranges with U.S.
markets closed for a holiday, and with players digesting
Friday's economic data which boosted expectations the U.S.
Federal Reserve would adopt more quantitative easing to shore up
the U.S. economy.
Those expectations pushed up equity markets in central
Europe as they tracked west European markets.
At 0749 GMT, the forint <EURHUF=> was 0.1 percent firmer
versus the euro, while the Polish zloty <EURPLN=> eased 0.15
percent. The Czech crown <EURCZK=> and the Romanian leu
<EURRON=> were broadly flat.
Budapest stocks were up 0.8 percent <>, while the Warsaw
bourse traded 0.74 percent higher.
"I think we will see the forint moving between 273.50 and
275 versus the euro today, in range trading, with low volumes
and this will be the case across the region," a Budapest
currency dealer said.
The forint, first firmed to levels past 270 last week then
reversed direction in what dealers saw as a natural correction
as gains had diverged from the economy's fundamentals.
"The relatively quick shift in the forint rate shows to us
that the recent firming can be quickly undone, as it is based on
very uncertain fundamentals (i.e. optimistic expectations
regarding the government's future budget policy)," CIB Bank said
in a morning note on Monday.
Hungary's budget deficit <HUDEF=ECI> stood at 125 percent of
the government's full-year target in September, and analysts
said very tight fiscal policy was needed to meet the year-end
target. []
The market is awaiting details of the 2011 budget, which the
Economy Ministry is due to submit to the government by Friday,
although it is not clear when they will be made public.
Markets will be closely eyeing details of the budget plans
to see if the government's pledge to cut the deficit to below 3
percent of GDP next year is backed up by sustainable measures.
Hungarian Prime Minister Viktor Orban will unveil a second
economic action plan later this week, laying the foundations for
the budget deficit to meet the European Union's requirements,
the daily Nepszabadsag wrote on Monday.[]
The Czech crown was steady after data showed September
inflation was a touch higher than expected and reached the
central bank's 2 percent target. []
Some analysts say a debate on rate hikes may start by the
end of the year. One central banker voted for a rate hike at the
bank's last meeting.
"The Czech crown's performance and situation in the global
economy will be the key drivers of any decision of the Czech
central bank, in our opinion," Generali PPF Asset Management
analyst Radomir Jac said.
The crown has been the best-performing emerging European
currency this year. Czech central bank chief Miroslav Singer
said in a presentation released on Monday that there is no
reason to intervene against the Czech crown. []
Daily Hospodarske Noviny quoted Singer as saying the crown's
present value was not dramatic although "the pace of
appreciation in the past days was rather steep."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.481 24.469 -0.05% +7.5%
Polish zloty <EURPLN=> 3.973 3.967 -0.15% +3.3%
Hungarian forint <EURHUF=> 274.4 274.72 +0.12% -1.48%
Croatian kuna <EURHRK=> 7.319 7.315 -0.05% -0.13%
Romanian leu <EURRON=> 4.268 4.265 -0.07% -0.72%
Serbian dinar <EURRSD=> 105.81 105.81 0% -9.38%
All data taken from Reuters at 0950 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
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(Reporting by Krisztina Than; Editing by Susan Fenton)
