CEE MARKETS 1-Zloty edges up as FX hold steady

                                
 * Zloty rises a touch; most FX steady
                                
 * Stocks extend gains, Warsaw blue-chips at 2-yr high
PRAGUE, Nov 5 (Reuters) - The Polish zloty edged up on
Friday and flirted for a second day with the 3.90 per euro
resistance level as emerging European assets held firmer from a
rise in risk appetite after Federal Reserve action.
                                
 The U.S. Fed's decision this week to buy $600 billion in
U.S. Treasury bonds in a second round of quantitative easing
(QE2) is driving money flows into emerging markets as investors
chase higher growth and yields. [ID:nN03163902]
                                
 Central European stock markets rose up to 1 percent, with
Warsaw blue-chips <.WIG20> at their highest level since August
2008.
                                
 The zloty <EURPLN=> has led gains recently among emerging
Europe thanks to growing expectations for a rate hike, and the
unit rose 0.1 percent to bid at 3.905 to the euro by 0822 GMT.
                                
 The Hungarian forint <EURHUF=> edged down less than 0.1
percent following September output data that showed a 10.9
percent rise, in line with expectations and down from the
previous month. [ID:nLDE6A40C3]
                                
 The forint has been weighed down by credit ratings risks
this week. In the Czech Republic, the crown <EURCZK=> was
steady, off a two-year high it hit on in the previous session.
 "The Fed's announcement of additional QE reinforced our
bullish view on emerging markets," Societe Generale said in its
weekly emerging markets report. 
                                
 "We continue to favour the zloty on the back of an increased
rate hike probability before the end of the year."
                                
 The zloty got a lift this week from calls for a rate hike to
cap inflationary pressures by some Polish central bankers who
had previously voted for stable rates. [ID:nLDE6A20C0]
                                
 But some analysts have said QE2 and a likely delay in
European Central Bank rate tightening could lead to strong zloty
gains that would hurt economic recovery and put pressure on the
central bank to stay on hold for longer.
                                
 The Czech central bank kept rates at record lows on Thursday
as expected but surprised by pushing back the expected start of
rate hikes toward the end of the next year while cutting its
2011 growth forecast to lower than 2010. [ID:nLDE6A31FW]
Romania's central bank raised its inflation forecasts on
Thursday, signalling rate cuts that could help the recession-hit
economy are unlikely. [ID:nLDE6A30SF]
                                
 The leu <EURRON=> was up 0.1 percent on Friday, but off
highs from the week.
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>   24.51    24.505  -0.02%    +7.38%
Polish zloty     <EURPLN=>    3.905    3.908  +0.08%    +5.1%
Hungarian forint <EURHUF=>  273.1    272.96   -0.05%    -1.01%
Croatian kuna    <EURHRK=>    7.343    7.339  -0.05%    -0.46%
Romanian leu     <EURRON=>    4.286    4.289  +0.07%    -1.13%
Serbian dinar    <EURRSD=>  107.15   107.23   +0.07%    -10.52%
All data taken from Reuters at 0923 CET.
Currency percent change calculated from the daily domestic 
close at 1700 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet; editing
by Sujata Rao)