* Forint, zloty stable, U.S. figures lend support
* Politics weigh on leu, budget concern on crown
* Hungary cbank rates seen lower, others on hold
(Recasts with new prices, comments and background.
By Jason Hovet and Sandor Peto
PRAGUE/BUDAPEST, Dec 11 (Reuters) - Central European
currencies were mixed on Friday, as hopes for global recovery
triggered by strong U.S. retail figures mingled with fiscal
concerns in the region and the periphery of the euro zone.
The region's main currencies gave up some ground this week
after warnings from rating agencies over fiscal problems in
countries in the euro zone's periphery, including Greece.
Most hit were the zloty <EURPLN=> and the forint <EURHUF=>,
usual risk proxies in the region.
In late trade on Friday the two units were near Thursday's
closing levels, while concern over Romania's political stalemate
weighed on the leu, and the Czech crown also eased.
The U.S. figures lifted the dollar against the euro.
This usually weakens currencies in emerging markets, but the
message this time was an expected continuation of global
recovery and possible relief to the region's export-led
economies, rather than a rise in risk aversion, dealers said.
The U.S. data helped the zloty rebound from a dip caused by
an unexpected widening in the Polish current account deficit in
October[].
"The U.S. figures probably strengthened hopes for recovery,"
one Budapest-based trader said. "But the other side is that
markets watch budget deficit risks in some European countries."
"Other states can get on the watch list, too, but I expect
sideways trade in the region as we near the the year-end."
BUDGETS, RATES WATCHED
Recession, or in the case of Poland economic slowdown, has
put pressure on budgets in the region and warnings to Greece and
other euro zone members this week over fiscal policy highlighted
uncertainty over budgets and debt in Central Europe.
The Czech crown lost 0.2 percent against the euro by 1606
GMT on Friday, after the main Czech party pushed through extra
2010 budget spending earlier this week.[]
The leu eased 0.3 percent, as political uncertainty drags on
following Sunday's presidential runoff vote.
The Constitutional Court called for a recount of votes
annulled, a ruling that could possibly overturn incumbent Traian
Basescu's narrow victory. []
"If (Mircea) Geoana ends up winning, I maintain the view
that meeting the IMF conditions (for reopening the aid tap for
Romania) will take somewhat longer -- couple of months before
the money is released," said Wood&Co analyst Raffaella Tenconi.
Apart from budget news, investors also watch whether central
banks in the region will further cut interest rates to help
their recession-hit economies.
Most analysts expect the Czech central bank to keep its key
rate on hold at a record low of 1.25 percent on Dec 16., though
a tight vote is expected as comments from rate setters have
tipped the scale towards a cut.[] []
Hungary published higher-than-expected November inflation
figures, but recession is seen pushing inflation to below the
central bank's (NBH) 3 percent target next year. []
[]
NBH Governor Andras Simor said the pace of further cuts in
the 6.5 percent base rate would hinge on investors' appetite of
risk in the near future [], and market participants
expect a 25 or 50 basis point reduction at the Dec. 21 meeting.
Romanian rates, though, are seen staying on hold until
political haggling in the country comes to end, and a new
government is formed that can put the country's IMF-led aid
package back on track. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.761 25.709 -0.2% +3.85%
Polish zloty <EURPLN=> 4.148 4.15 +0.05% -0.8%
Hungarian forint <EURHUF=> 273.11 273.01 -0.04% -3.5%
Croatian kuna <EURHRK=> 7.262 7.259 -0.04% +1.42%
Romanian leu <EURRON=> 4.254 4.24 -0.33% -5.63%
Serbian dinar <EURRSD=> 95.75 95.727 -0.02% -6.55%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +3 basis points to 114bps over bmk*
7-yr T-bond CZ7YT=RR -10 basis points to +90bps over bmk*
10-yr T-bond CZ10YT=RR -4 basis points to +80bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -3 basis points to +382bps over bmk*
5-yr T-bond PL5YT=RR -4 basis points to +337bps over bmk*
10-yr T-bond PL10YT=RR -5 basis points to +299bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -4 basis points to +545bps over bmk*
5-yr T-bond HU5YT=RR -4 basis points to +497bps over bmk*
10-yr T-bond HU10YT=RR -4 basis points to +438bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1606 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/Sandor
Peto; Editing by Toby Chopra and Victoria Main)
