CEE MARKETS 3-Currencies gain, Polish c.bank holds fire

                                
 * Currencies firm, zloty leads as FX option harm seen milder
                                
 * Polish cbank holds rates, FX options fcasts upbeat
                                
 * Region benefits from dollar, yen weakening
                                
 * Czech eurobond eases pressure on local debt market
                                
 
                                
(Adds Polish rate decision, market reaction)
                                
 By Marton Dunai and Marius Zaharia
                                
 BUDAPEST/BUCHAREST, April 29 (Reuters) - Emerging European
currencies firmed on Wednesday on the back of a weaker dollar
and yen, and the zloty got a boost from lower forecasts for the
scale of companies' exposure to soured currency options.
                                
 The zloty firmed more than its peers as Poland's financial
watchdog halved its prediction for the option exposure, one
driver of the currency's weakness since last year, to 4.5
billion zlotys. [ID:nLS483867]
                                
 Many Polish companies got into trouble by hedging the wrong
way last year when the zloty was trading at record highs.
                                
 With those concerns easing, markets showed little reaction
to Poland's central bank's decision to pause in its cycle of
interest rates for the first time since November, with many
analysts saying the bank is still likely to ease. [nLT440545]
                                
 "I think the central bank will remain relatively dovish,"
said Gillian Edgeworth, an economist at Deutsche Bank, ahead of
a NBP press conference expected for later in the day. "Economic
activity remains weak, and (...) inflation pressures continue to
trend downwards."
                                
 "Looking ahead, one to two modest rate cuts seem plausible,"
she added.
                                
 Poland has gone through an aggressive 225 basis point easing
since November to help its slowing economy, but this has added a
significant weakening pressure on the zloty, which lost 30
percent from summer highs as the financial crisis unfolded.
                                
 By 12:25 GMT, the zloty <EURPLN=> rose 1.5 percent from the
domestic close, the Hungarian forint <EURHUF=> gained 1.2
percent, while the Czech crown <EURCZK=> remained stable and the
Romanian leu <EURRON=> added 0.6 percent.
                                
 
                                
 GLOBAL SENTIMENT HELPS
                                
 Dealers said the region also gained from stronger tolerance
to risk due to benign U.S. housing data on Tuesday and some
stronger than expected corporate results. 
                                
 But concerns about a global swine flu outbreak still
weighed, threatening to add to a global slowdown that has hit
central Europe's export-driven economies.
                                
 In debt markets, Hungarian bonds ticked up in line with the
forint, while Czech bonds were little changed.
                                
 The Czech Republic priced a 1.5 billion 2014 euro bond on
Wednesday, and said it was unlikely to return to international
markets this year. [ID:nLT658651].
                                
 The eurobond issue takes pressure off the local debt market,
securing a large chunk of the country's financing needs.
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   26.686    26.71 +0.09%    +0.25%
Polish zloty     <EURPLN=>   4.419    4.485  +1.49%    -6.88%
Hungarian forint <EURHUF=>   289.3    292.9  +1.24%    -8.9%
Croatian kuna    <EURHRK=>   7.418    7.436  +0.24%    -0.71%
Romanian leu     <EURRON=>   4.185    4.213  +0.67%    -4.08%
Serbian dinar    <EURRSD=>   95.023    95.02   0%      -5.83%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -4 basis points to  +189bps over bmk*
4-yr T-bond   CZ4YT=RR    +3 basis points to  +205bps over bmk*
8-yr T-bond   CZ8YT=RR    -3 basis points to  +297bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -5 basis points to  +426bps over bmk*
5-yr T-bond   PL5YT=RR    -3 basis points to  +366bps over bmk*
10-yr T-bond PL10YT=RR    -6 basis points to  +308bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR    -26 basis points to +1123bps over bmk*
5-yr T-bond   HU5YT=RR    -61 basis points to +1048bps over bmk*
10-yr T-bond   HU10YT=RR  -52 basis points to  +897bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1422 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus; writing by Marton Dunai and
Marius Zaharia; editing by Patrick Graham)