BUDAPEST, June 3 (Reuters) - Emerging Europe's currencies
firmed slightly on Thursday and continued to track the
euro/dollar cross, with the Czech crown underperforming as
investors wait for coalition talks to gain momentum there.
Three Czech centre-right parties met on Wednesday to try to
agree policies for a coalition government, but disagreements
were likely in several areas and the probable prime minister
said a deal would take weeks. []
"This has been factored into the market, so no reaction. The
crown (eased) to 25.8, but this isn't from domestic reasons --
after nervousness eases, we expect a return to below 25.50 and
heading toward 25," Ceska Sporitelna said about the news.
President Vaclav Klaus, who has yet to ask someone to form
the next government, will meet with the most likely prime
minister, Civic Democrat leader Petr Necas, at 0800 GMT.
"We still have a positive bias for the koruna, and believe
that it could gain further ground as soon as talks finalize and
the setup of the new government becomes definite," CIB Bank in
Budapest said in a note.
At 0721 GMT, the Polish zloty <EURPLN=> led gains by rising
0.7 percent, while the crown <EURCZK=> was up 0.3 percent at
25.703 per euro and the forint<EURHUF=> was 0.4 percent higher.
The Romanian leu <EURRON=> was flat.
Polish markets were closed for a national holiday.
Stocks also rose slightly, with Prague and Budapest 1.7
percent firmer each, and Polish stocks up 0.4 percent.
"We expect range trading to continue today, although at
somewhat firmer levels," a Budapest based currency dealer said.
"I think the forint will move between 274 and 276.50,
tracking the euro/dollar ... if the euro weakens, we will also
weaken," the dealer added.
Concerns over debts, deficits and growth in the euro zone,
central Europe's main trading partner, have been weighing on the
region's markets in the past few weeks.
Thursday's government bond auctions in Hungary <HUISSUE>
will test appetite for local assets after the central bank held
fire on Monday, holding rates at 5.25 percent. <NBHI>
The Czech central bank surprisingly cut its main rate to a
new record low of 0.75 percent last month <CZCBIR=ECI><CZRP=>
before the elections but a central banker told Reuters on
Wednesday that it was becoming increasingly difficult to cut.
Vice-Governor Miroslav Singer told Reuters that no event
since the last policy meeting has provided a reason to change
interest rates and it is becoming more and more difficult for
the board to cut rates. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.703 25.775 +0.28% +2.39%
Polish zloty <EURPLN=> 4.072 4.1 +0.69% +0.79%
Hungarian forint <EURHUF=> 274.13 275.24 +0.4% -1.38%
Croatian kuna <EURHRK=> 7.259 7.259 0% +0.69%
Romanian leu <EURRON=> 4.182 4.185 +0.07% +1.32%
Serbian dinar <EURRSD=> 102.66 102.37 -0.28% -6.6%
All data taken from Reuters at 0921 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Krisztina Than; editing by Jason Webb)
