* Hungary, Romania, Czech GDP beat forecasts
* Forint gains; euro zone concerns dent broader appetite
* Zloty retreats after earlier challenging 3.89/eur level
(Updates throughout)
By Dagmara Leszkowicz and Jason Hovet
WARSAW/PRAGUE, Nov 12 (Reuters) - Emerging Europe's
currencies were little changed on Friday as better than expected
growth data was largely overshadowed by renewed risk aversion on
concerns about the euro, the region's reference currency.
The export-heavy Hungarian and Czech economies beat growth
forecasts in the third quarter, supported by a German-backed
export and manufacturing recovery.
Romania also beat expectations, but only by shrinking less
than expected quarter-on-quarter. Austerity measures aimed at
cutting the public deficit are expected to knock the economy
back around 2 percent this year. []
Poland publishes GDP data later. Finance Minister Jacek
Rostowski said on Friday he expected growth in the European
Union's largest ex-communist economy to top 3.4 percent this
year and 3.7 percent in 2011.[]
Dealers said the GDP readings had a slight impact on
currencies, primarily the forint, but that the key focus for
investors remained on trimming risk as ongoing concerns that
Ireland may be pushed into a seeking outside help to manage its
debt weighed on the region. [] []
Analysts said the data spelled good news in the longer term
for those regional currencies backed by strong growth and fiscal
positions, with the U.S. Federal Reserve's commitment to buy
$600 million in bonds in a second round of quantitative easing
(QE2) also offering potential for gains. []
The Fed move is seen driving money flows into emerging
markets as investors chase higher growth and yields, but so far
it has mostly skipped over emerging Europe.
The Hungarian forint <EURHUF=> edged up 0.3 percent to
276.09 to the euro by 1506 GMT, rebounding from lows at the
start of the session when it weakened above the 278 level.
The forint traded weaker than 278 for much of the summer
when markets worried about Hungary's budget, before breaking
through in September, and dealers have said it will be strong
support level for the currency.
Hungary's bonds recovered some of their recent losses, with
yields dropping 10-15 points after the GDP data.
"I expect a hectic, volatile couple of weeks ahead," a
dealer in Budapest said. "The Irish situation won't fully calm
down before parliament there votes on the 2011 budget on Dec. 7,
and the same is expected in Hungary ahead of the budget vote."
Hungary should to meet its budget deficit target easily in
2011, but the measures have raised questions on its
sustainability. Extra taxes on banks and other business sectors
such as energy have also spooked investors. []
ZLOTY GAINS AHEAD?
The Czech crown <ERUCZK=> and Romania's leu <EURRON=> each
fell 0.1 percent, while Poland's zloty <EURPLN=> added a quarter
percent to bid at 3.925 to the euro.
Analysts polled by Reuters expect the zloty to lead emerging
European currency gains with a 4 percent rise in the next 12
months, while the forint is expected to stay little changed.
The zloty had several times firmed below the technical level
of 3.89 to the euro but failed to sustain its gains.
"Despite natural flows linked to privatisation, it seems the
market was over-optimistic when it comes to the zloty, and those
who got PLN are trying now to get rid of it," said one
Warsaw-based dealer.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.613 24.59 -0.09% +6.93%
Polish zloty <EURPLN=> 3.925 3.935 +0.25% +4.56%
Hungarian forint <EURHUF=> 276.09 276.91 +0.3% -2.08%
Croatian kuna <EURHRK=> 7.378 7.371 -0.09% -0.93%
Romanian leu <EURRON=> 4.291 4.285 -0.14% -1.25%
Serbian dinar <EURRSD=> 106.85 107.11 +0.24% -10.27%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -11 basis points to 67bps over bmk*
7-yr T-bond CZ7YT=RR -2 basis points to +86bps over bmk*
10-yr T-bond CZ9YT=RR -5 basis points to +101bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -10 basis points to +556bps over bmk*
5-yr T-bond HU5YT=RR -6 basis points to +541bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +462bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1605 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaux, Writing by Dagmara Leszkowicz
and Jason Hovet; Editing by Giles Elgood, John Stonestreet)
