BUDAPEST, Nov 26 (Reuters) - East Europe's currencies eased
on Thursday morning tracking Asian stock losses, with the forint
leading declines, and thin liquidity due to the market holiday
in the U.S. could cause increased volatility, dealers said.
Asian stocks fell after the dollar hit a 14-year low against
the yen and Japanese exporters dropped.
Global investor sentiment was also dented by news out of
Dubai where the government said it will seek debt delay for its
two flagship firms.[]
"I think we weakened a bit due to the drop of Asian stocks
and also comments from (Hungarian opposition party) Fidesz about
a 7 percent budget deficit next year contributed to this
weakening," a dealer in Budapest said.
"They repeat more and more that in 2010 the deficit will
overshoot and foreigners don't like this now."
Mihaly Varga, former finance minister and a top economic
advisor in Fidesz, told Reuters on Wednesday that Hungary's
budget deficit could come in at 7.0-7.5 percent of gross
domestic product (GDP) next year mainly due to one-off spending
items not included in the present draft budget.
Varga also said main opposition party Fidesz, widely
expected to win elections in early 2010, will aim to set a euro
adoption target date by the end of next year because markets
need an anchor. []
"The level of 270.20/50 for the forint is an important
resistance as if it weakens past this level then technically the
forint can ease further," another currency dealer said.
The forint <EURHUF=> was 0.8 percent weaker, while the
Polish zloty <EURPLN=> was down 0.3 percent and the Czech crown
was down 0.7 percent.
"At the moment it's very important that we broke the 26.00
per euro level and we stay there, which shows that at a level
around 25.80 the crown versus the euro <EURCZK=> found some
support and a path is open to more weakening," David Sykora, FX
dealer at bank CSOB.
He said he estimated the unit could be around 26.25 at the
end of the week and at 26.50 to 27.00 at the end of the year.
The crown has separated from the rest of the region in its
latest weakening, while it was alone in strengthening in the
past month, he said. This was due to a pick up in trade among
currencies of the region given by high interest rate
differentials, Sykora said.
The Romanian leu <EURRON=> eased off its highest level
versus the euro in more than seven weeks hit in the previous
session, as some investors were booking profits, dealers said.
"The leu is a touch weaker on the day, it looks like there
is some profit taking on currencies in the region," said a
dealer in Bucharest.
"But it is just a break before it likely firms again. The
leu still has potential to firm to 4.2 ... because of a
combination of election nearing an end, high interest rates and
regional mood."
Romania's finance ministry tenders 500 million euros in
1-year treasury bills on the domestic market.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.155 25.969 -0.71% +2.29%
Polish zloty <EURPLN=> 4.124 4.11 -0.34% -0.22%
Hungarian forint <EURHUF=> 270.2 267.94 -0.84% -2.46%
Croatian kuna <EURHRK=> 7.31 7.308 -0.03% +0.75%
Romanian leu <EURRON=> 4.264 4.26 -0.09% -5.85%
Serbian dinar <EURRSD=> 94.31 94.64 +0.35% -5.12%
All data taken from Reuters at 0952 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Krisztina Than)
((krisztina.than@reuters.com; tel +36 309 865 969; rme
krisztina.than@reuters.com.net))
