BUDAPEST, Sept 5 (Reuters) - Central European currencies
extended their losses on Friday as a continued rally of the U.S.
dollar<EUR=> against the region's reference currency, the euro,
wiped out their early gains.
The dollar dipped only briefly after weak U.S. payroll
figures which heighten fears over economic growth all over the
world, increase investors' risk aversion and fuel a broad-based
sell-off in emerging markets.
Central European currencies have been weakening for weeks as
their main export markets in western Europe show more and more
signs of an economic slowdown.
The impact can be slower economic growth in the region and
possibly lower inflation, and those prospects have already led
to a central bank interest rate cut in the Czech Republic.
Czech data to be published on Monday are expected to show a
decline in annual inflation in August to 6.6 percent from 6.9 in
July, while Hungary's inflation is seen flat at 6.65 percent and
is unlikely to trigger hopes for a rate cut, analysts said.
The Czech crown<EURCZK=> eased 0.23 percent against the euro
by 1434 GMT to 24.925, while the forint shed 0.3 percent to
trade at 242.20 and dealers said it may ease further.
"A very bad mood in emerging markets and the very strong
dollar together weaken the region," one dealer in Budapest said.
"Among domestic factors, political uncertainty did not help and
the GDP also did not improve sentiment."
Hungary revised second-quarter annual economic growth to 2.0
percent from 2.2 percent on Friday and analysts said any
recovery would be slow or fragile.
Poland's zloty <EURPLN=> eased 1.5 percent against the euro
to 3.447 as the U.S. dollar firmed.
"Europe's economy is entering a phase of slower growth,
while the U.S. seems to have the worst behind it...The dollar
continues to strengthen (also) thanks to lower oil prices," a
trader at a Warsaw-based foreign bank said.
Romania's leu<EURRON=> hit it lowest level since the middle
of July and traded at 3.608 to the euro, weaker by 0.84 percent,
suffering from concern over the country's fiscal position.
"Currently there seems to be no real triggers... for CEE
(Central European) sentiment to tunr more positive," Danske Bank
said in its weekly report on new European Union members.
--------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.925 24.869 -0.23% +5.93%
Polish zloty <EURPLN=> 3.447 3.396 -1.5% +4.26%
Hungarian forint <EURHUF=> 242.2 241.48 -0.3% +4.21%
Croatian kuna <EURHRK=> 7.134 7.153 +0.27% +2.63%
Romanian leu <EURRON=> 3.608 3.578 -0.84% -0.78%
Serbian dinar <EURRSD=> 76.61 76.76 +0.2% +2.73%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +8 basis points to +16bps over bmk*
5-yr T-bond CZ5YT=RR +9 basis points to +27bps over bmk*
10-yr T-bond CZ9YT=RR +3 basis points to +44bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +10 basis points to +541bps over bmk*
5-yr T-bond HU5YT=RR +15 basis points to +504bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +412bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1634 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Editing by Ron Askew)
