(Recasts, with new comments and prices.)
By Sandor Peto and Dagmara Leszkowicz
BUDAPEST/WARSAW, Feb 6 (Reuters) - Central European
currencies were mixed on Friday, with the forint and the zloty
firming due to planned central bank measures, even though
Hungary published dismal industrial output data.
The Czech crown <EURCZK=> and the Romanian leu <EURRON=>
stayed near Thursday's levels after central bank interest rate
cuts in both countries earlier this week, just like Croatia's
kuna <EURHRK=>, while the Serbian dinar <EURRSD=> eased.
Analyst forecasts in a Reuters poll showed that the region's
main currencies were expected to weaken in the next months and
not expected to recover from the steep falls of the past months
until the second half of the year. []
The currencies have been hit by figures showing a drastic
economic slowdown in the export-heavy region or recession in the
case of Hungary, and because central banks have delivered rate
cuts to help their economy weather the global crisis.
The latest in a string of bad economic figures was a 19.6
percent annual plunge in Hungary's industrial output in December
according to figures published early on Friday. []
Despite the figures, the forint extended gains posted on
Thursday after the central bank announced that it would launch a
five billion euro facility of six-month swaps to help domestic
banks maintain last year's levels in lending to companies.
Dealers said the news also helped the Polish zloty and later
both currencies, which have been tightly correlated in the past
days, received additional support from comments about possible
currency market intervention by Poland's central bank.
[]
The forint <EURHUF=> traded at 289.76 against the euro at
1542 GMT, firmer by 1.2 percent, while the zloty gained 1.23
percent to 4.556 per euro.
"Frankly, I don't think that it was the last time earlier
this week that we saw the forint at 300," one dealer said. "Both
the forint and the zloty are very vulnerable, they will react to
any negative news and their weakening will not be slower than
their current firming."
The Romanian leu was flat at 4.25 against the euro, while
the Czech crown eased 0.14 percent to 27.985.
The crown gave up Thursday's one percent gains which it
posted after the central bank surprised the market with a
forecast showing it expected the average crown rate versus the
euro at 25.8 this year, much stronger than current levels.
But dealers and analysts expect much weaker levels due to
the declining econmy.
"This is an expected pullback for the crown," a Prague
dealer said. "There is no reason to see the EURCZK at such low
levels."
Czech Deputy Finance Minister Eduard Janota said on Friday
that the country would not rush into its planned Eurobond issue
because spreads were too high. []
Czech domestic bond yields ticked up and Hungarian
government bonds also extended their losses, taking no
encouragement from the forint's rebound which traders said was
caused by profit-taking by foreign banks rather than inflows
into the debt market.
"It's worrying that the forint recovery had no impact...
this is not good news ahead of the planned restart of government
bond auctions next week, but it's good to try, if the auctions
fail, sentiment cannot become worse than now," one trader
said.[]
The leu shrugged off central bank comments that Romania
needs to keep its monetary policy tight until fiscal and wage
restrictiveness is enforced [].
"Monetary policy depends on the fiscal policy and the fiscal
policy is the biggest uncertainty so far," one dealer said.
"Nobody knows how or if the budget deficit target of 2 percent
of GDP will be achieved."
Dealers have said they suspected the central bank intervened
covertly in the market earlier this week as economic concerns
and uncertainty over fiscal plans weighed on the leu.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.985 27.945 -0.14% -4.4%
Polish zloty <EURPLN=> 4.556 4.612 +1.23% -9.68%
Hungarian forint <EURHUF=> 289.76 293.23 +1.2% -9.05%
Croatian kuna <EURHRK=> 7.396 7.4 +0.05% -0.42%
Romanian leu <EURRON=> 4.25 4.25 0% -5.54%
Serbian dinar <EURRSD=> 92.235 91.726 -0.55% -2.99%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +39 basis points to 138bps over bmk*
4-yr T-bond CZ4YT=RR -1 basis points to +100bps over bmk*
8-yr T-bond CZ8YT=RR -5 basis points to +112bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +7 basis points to +968bps over bmk*
5-yr T-bond HU5YT=RR +9 basis points to +917bps over bmk*
10-yr T-bond HU10YT=RR +10 basis points to +733bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1642 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Sandor
Peto/Dagmara Leszkowicz; editing by Stephen Nisbet)
