BUDAPEST, July 6 (Reuters) - Central European currencies
extended their gains for the week in early trade on Tuesday,
boosted by market-supportive news over the weekend and a stabler
euro versus the dollar.
At 0740 GMT, all regional currencies were in the black, with
Romania's leu <EURRON=> and Hungary's forint <EURHUF=> leading
modest gains with increases of 0.5 and 0.3 percent,
respectively.
"We are tracking the euro/dollar <EUR=> cross. (It) looks
like it has found a footing and markets have now priced in most
of the risks existing in the European economy," a Budapest-based
currency dealer said.
"The euro may not fall to 1.2 (versus the dollar) at the end
of the day, so we are now firming along with the region," the
dealer said. "Sentiment is a bit more supportive, stocks are
edging higher and we expect a positive close in Asia as well."
The leu <EURRON=> continued to benefit from the
International Monetary Fund's decision to release the latest
tranche of its economic bailout deal.
The possibility of Romania's national bank intervening to
prevent weakening of the leu -- which hit all-time lows against
the euro last week -- is also supportive, dealers said.
"It seems it's on a continuing firming trend since last
week," said a Bucharest-based dealer. "It's also helped by the
national bank."
The leu has now risen nearly 4 percent since last Thursday,
when it hit its lowest since the introduction of the euro on
worries about the speed of the economic recovery and whether the
IMF would release more funds, which it did on Friday.
Poland's zloty <EURPLN=> continued to get support from the
victory of moderate conservative Bronislaw Komorowski in the
presidential election, which markets expect will ease the
implementation of further economic reforms.
"It looks like a wave of optimism touched the market," said
one Warsaw-based dealer. "It's still not risk appetite, though
risk aversion eased for sure."
"Komorowski's victory just fits the global trend."
In Hungary, a review of a 20 billion euro IMF/EU loan deal
is due to begin on Tuesday. Economy Minister Gyorgy Matolcsy
told parliament the debt-laden country will only agree with
lenders on a new financing deal if the agreement supports its
economic priorities.
Matolcsy told Reuters in an interview last week that Hungary
would seek to sign a new, two-year precautionary loan agreement
with the IMF and the EU worth about 10-20 billion euros.
[]
The talks may also touch on the issue of a new financial
sector tax, which Hungary's government hopes will raise 187
billion forints this year, helping cut the deficit to the 3.8
percent of GDP target agreed with its lenders.
Data on Monday showed the deficit in the first half reached
nearly 120 percent of the full-year target. However, analysts
said higher tax revenues in the second half of the year would
make the target achievable. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.492 25.519 +0.11% +3.24%
Polish zloty <EURPLN=> 4.109 4.113 +0.1% -0.12%
Hungarian forint <EURHUF=> 284.6 285.36 +0.27% -5.01%
Croatian kuna <EURHRK=> 7.191 7.194 +0.04% +1.64%
Romanian leu <EURRON=> 4.235 4.256 +0.5% +0.06%
Serbian dinar <EURRSD=> 104.04 104.05 +0.01% -7.84%
All data taken from Reuters at 0940 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Gergely Szakacs)
