(Adds crown joining rally)
BUDAPEST, Sept 10 (Reuters) - Emerging European currencies
rose sharply late on Wednesday after Polish Prime Minister
Donald Tusk said Poland would seek to adopt the euro in 2011,
earlier than markets had expected.
"The Polish Prime Minister gave the zloty a shot in the arm
and also lifted the rest of the region with his announcement of
the 2011 euro date," a currency dealer said.
The Polish zloty <EURPLN=> surged on Tusk's comment, trading
as much as 1.7 percent higher at one point. It ended up 1.6
percent, also boosted by two Polish central bankers who said the
2011 date was technically possible.
"As opposed to previous comments this sounds more like an
official target. If so, it would imply Poland needs to join
ERM-2 very soon," Bank Austria's Martin Blum said.
"It's still not clear, however, whether PM Tusk meant to
make such a strong statement."
Dealers said some profit-taking was inevitable after
Wednesday's big currency move.
"This was a big surge which probably burnt a lot of people
sitting on long euro positions so I'd expect some retreat," a
dealer said.
Most regional currencies had been weakening earlier in the
session before rebounding with the zloty.
The Hungarian forint <EURHUF=D2>, which had traded down all
day, made a nearly 1.5 percent intraday gain on the Polish news
but later retreated to end the day a touch weaker.
Hungary will release August inflation data on Thursday, with
analysts looking for a further slowdown in price growth that
would provide guidance on when interest rates could be lowered.
The Czech crown <EURCZK=> also joined the rally late in the
day to gain 1.1 percent.
The Romanian leu <EURRON=> was the day's only loser after
falling heavily in early trade and only recouping some of the
losses in afternoon trade.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.488 24.798 +1.25% +7.58%
Polish zloty <EURPLN=> 3.401 3.457 +1.62% +5.54%
Hungarian forint <EURHUF=> 238.900 239.000 +0.04% +5.52%
Croatian kuna <EURHRK=> 7.123 7.133 +0.14% +2.78%
Romanian leu <EURRON=> 3.591 3.579 -0.34% -0.30%
Serbian dinar <EURRSD=> 76.410 76.43 +0.03% +2.98%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -9 basis points to 10bps over bmk*
5-yr T-bond CZ5YT=RR +5 basis points to +32bps over bmk*
10-yr T-bond CZ9YT=RR +11 basis points to +47bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +232bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +223bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +198bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -2 basis points to +516bps over bmk*
5-yr T-bond HU5YT=RR -2 basis points to +483bps over bmk*
10-yr T-bond HU10YT=RR -3 basis points to +388bps over bmk*
*Benchmark is German bond equivalent.
All currency data taken from Reuters at 1658 CET.
All bond data taken from Reuters at 1538 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Balazs Koranyi;
editing by Swaha Pattanaik and Patrick Graham)
