BUDAPEST, Sept 5 (Reuters) - Central European currencies
opened broadly firmer against the euro on Friday but ongoing
dollar strength and weak local data, as in Hungary, was expected
to sustain pressure on regional assets.
Hungary's forint opened a shade firmer against the euro,
paring some of Thursday losses in excess of one percent despite
domestic economic data which pointed to downside risks to a
recovery in economic growth in the coming quarters.
At 0737 GMT, the forint <EURHUF=> traded at 240.94 to the
euro, slightly weaker from earlier highs at 240.75.
Data released by the Central Statistics Office on Friday
showed Hungary's economy grew by just 2 percent in the second
quarter according to final data, down from a preliminary
estimate of 2.2 percent.
Industrial output growth rebounded to 0.6 percent in July
from a decline of 0.3 percent in June. However, a big fall in
the working day-adjusted figure pointed to risks in future
growth, which analysts said was forint negative.
"Industrial production already suggests potential slowdown
in growth such that the rebound in GDP will prove short-lived,"
said analyst Dwyfor Evans at State Street Bank and Trust Co.
"In an environment where investors shy from EM and other
risky assets and where European growth falters, the HUF will
come under pressure," he said.
Sentiment in the bond market was equally poor, with traders
saying the global environment remained unsupportive and not even
high interest rates could be sufficient to boost appetite for
Hungarian assets.
"Sentiment is quite bad... It's certainly not true that in
foreigners eyes central bank interest rates at 8.5 percent means
that a market is attractive," a Budapest-based fixed income
trader said.
"After yesterday's tightening in collateral rules by the ECB
there is the threat of a liquidity crunch again," he said.
Croatia's kuna <EURHRK=> traded at 7.1337/7.1387 per euro on
Friday morning, slightly stronger from Thursday's 7.1363/7.1413
level.
A dealer at a major local bank said he did not see any big
kuna rate movements in the coming days.
The trader said lower demand for the kuna from tourists at
the end of the summer season would to a degree counterbalance
corporate demand ahead of Hungarian oil company MOL's <MOLB.BU>
purchase of INA <INA.ZA> shares.
"I see the kuna trading between 7.12 and 7.16 per euro next
week and do not consider a central bank intervention likely",
the dealer said.
Poland's zloty <EURPLN=> and the Romanian leu <EURRON=>
bucked the regional trend, easing further versus the euro early
on, while the Czech crown <EURCZK=> was marginally stronger.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.853 24.869 +0.06% +6.2%
Polish zloty <EURPLN=> 3.411 3.396 -0.44% +5.26%
Hungarian forint <EURHUF=> 240.94 241.48 +0.22% +4.71%
Croatian kuna <EURHRK=> 7.136 7.153 +0.24% +2.6%
Romanian leu <EURRON=> 3.587 3.578 -0.25% -0.19%
Serbian dinar <EURRSD=> 76.581 76.76 +0.23% +2.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +4 basis points to 11bps over bmk*
5-yr T-bond CZ5YT=RR +4 basis points to +22bps over bmk*
10-yr T-bond CZ9YT=RR -6 basis points to +34bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +235bps over bmk*
5-yr T-bond PL5YT=RR +6 basis points to +224bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +199bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +5 basis points to +531bps over bmk*
5-yr T-bond HU5YT=RR +5 basis points to +487bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +404bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0937 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Reporting by Gergely Szakacs)
