PRAGUE, May 2 (Reuters) - The Hungarian forint edged up and
the Czech crown steadied on Monday while emerging European
stocks were mixed following news al Qaeda leader Osama bin Laden
was killed.
Bourses in central Europe opened higher, tracking global
peers after a White House announcement that U.S. troops had
killed bin Laden, which gave a quick boost to world market.
But a slight rebound in the dollar cut appetite for central
Europe's currencies and limited forex gains.
The Prague bourse <> added half a percent, leading equity
gains with trading thin due to a London market holiday.
The forint <EURHUF=> added 0.3 percent and the crown
<EURCZK=> was flat at 24.196 to the euro by 0805 GMT.
The Polish zloty <EURPLN=> dipped 0.1 percent from Friday
and Romania's leu <EURRON=> slipped 0.2 percent to 4.083.
Currencies jumped to multi-month highs last month thanks to
a weakening dollar that sent investors to higher-yielding
assets, including in central Europe.
Despite a dollar rise on Monday, analysts see little relief
ahead for it as the U.S. Federal Reserve persists with its
ultra-loose monetary policy.
"It's not really a strong dollar rebound (versus the euro),"
Commerzbank FX strategist Lutz Karpowitz said. "We are still
sticking to the same stories in the FX markets."
Investors will be watching rate-setting meetings in Romania
and the Czech Republic this week to look for clues on the rate
outlook following hikes in Poland, Hungary and the euro zone,
Most analysts expect Romania's central bank to keep its key
rate at 6.25 percent through this year and resume the easing
cycle that has helped it through recession next year.
[]
The Czechs will also hold fire on rates, which are the
lowest in the region and below those of the euro zone. Markets
are betting on the start of interest rate rises in the coming
months, but the timing has become less certain. []
Inflation in the Czech Republic has remained tame and some
policymakers still favour no change in policy for now.
Analysts at CSOB bank said this could keep the crown under
pressure now that other banks are looking to tighten.
"We are expecting the differing rhetoric of the Czech and
European Central Bank will continue, which could play against
the crown," CSOB said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.198 24.203 +0.02% +3.31%
Polish zloty <EURPLN=> 3.93 3.925 -0.13% +0.71%
Hungarian forint <EURHUF=> 263.5 264.01 +0.19% +5.5%
Croatian kuna <EURHRK=> 7.362 7.362 0% +0.24%
Romanian leu <EURRON=> 4.082 4.075 -0.17% +3.7%
Serbian dinar <EURRSD=> 99.21 98.93 -0.28% +6.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -4 basis points to -21bps over bmk*
7-yr T-bond CZ7YT=RR -2 basis points to +40bps over bmk*
10-yr T-bond CZ9YT=RR -2 basis points to +69bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1004 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet;
Editing by John Stonestreet)
