BUCHAREST, Jan 16 (Reuters) - Central European currencies
firmed early on Friday, helped by risk aversion easing overnight
on renewed optimism about a fresh stimulus package in the U.S.
and the bailout of Bank of America Corp.
Bank of America Corp <BAC.N> was rescued by the U.S.
government on Friday through a $20 billion bailout and other
guarantees [].
Meanwhile, the U.S. Senate rejected a bid to block the
release of the second half of the $700 billion bailout programme
[] and Democratic leaders in the House of
Representatives unveiled a $825 billion tax cut and spending
bills they hope will help reverse the economic slump.
All these triggered a revive in investors' sentiment towards
high-yielding currencies and emerging markets.
The Czech crown <EURCZK=>, the Polish zloty <EURPLN=> and
the Hungarian forint <EURHUF=> firmed around 1 percent.
"The risk appetite has returned which is visible in yen
weakness and the strength in the euro against the dollar," said
Rafal Uss, a currency dealer at Raiffeisen Bank in Warsaw.
"Higher risk appetite means more willingness to invest in
emerging markets' currencies, including zloty," he added.
The Romanian leu <EURRON=> firmed 0.7 percent and dealers
said the currency was moving freely after two days of covert
central bank intervention to prop up the battered currency.
"The leu is moving on its own legs," one Bucharest-based
dealer said. "News in the U.S. are helping the region, I expect
firming until bad news triggers risk aversion again."
Currencies have been hit this week on the back of a fresh
round of data showing a deeper slowdown in the region's
economies, along with falling inflation that widens the scope
for interest rate cuts. []
A softer euro on Thursday, after the ECB rate cut to a
historic 2 percent and an ongoing gas row between Ukraine and
Russia also added pressures.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.04 27.301 +0.97% -1.06%
Polish zloty <EURPLN=> 4.163 4.208 +1.08% -1.15%
Hungarian forint <EURHUF=> 276.8 279.25 +0.89% -4.79%
Croatian kuna <EURHRK=> 7.363 7.36 -0.04% +0.03%
Romanian leu <EURRON=> 4.261 4.29 +0.68% -5.79%
Serbian dinar <EURRSD=> 93.04 93.33 +0.31% -3.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -4 basis points to 113bps over bmk*
4-yr T-bond CZ4YT=RR -3 basis points to +117bps over bmk*
8-yr T-bond CZ8YT=RR +7 basis points to +118bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +336bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +285bps over bmk*
10-yr T-bond PL10YT=RR -4 basis points to +250bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +16 basis points to +821bps over bmk*
5-yr T-bond HU5YT=RR +17 basis points to +777bps over bmk*
10-yr T-bond HU10YT=RR +16 basis points to +622bps 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.
For related news and prices, click on the codes in brackets:
All emerging market news []
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Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
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Official rates [] Emerging Diary []
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(Reporting by Reuters bureaus, writing by Marius Zaharia,
Editing by...)
