* Fx reverse losses as euro rebounds vs dollar
* Bratkowski comments temporarily weaken zloty
* Czech, Hungarian Jan output better than fcasts
* Serbian cbank sells euros again to support dinar
(Adds new prices and comments)
By Dagmara Leszkowicz and Sandor Peto
WARSAW/BUDAPEST, March 9 (Reuters) - Central European
currencies rebounded late on Tuesday as a retreat of the dollar
versus the euro, the region's reference currency, helped reverse
earlier losses.
Earlier in the day the region's currencies pulled back from
multi-month highs on profit-taking and comments from a Polish
central banker. But the units of the soundest economies, Poland
and the Czech Republic, returned to gains by late trade.
Dealers said an improving economic outlook is expected to
provide near-term support to assets in the European Union's
emerging markets.
Czech and Hungarian industrial output figures showed better
than expected performance in January.
Hungary's forint <EURHUF=> and the Romanian leu <EURRON=>
eased 0.2 percent to the euro by 1627 GMT, the Polish zloty
<EURPLN=> firmed a shade, while the Czech crown <EURCZK=> gained
0.1 percent.
The zloty weakened earlier after new Polish central banker
Andrzej Bratkowski, countering recent hawkish comments from
other rate setters, said it was too early to talk about a rate
hike and rates were likely to stay flat in 2010. []
Equities in the region also rebounded in late trade, though
Poland's <> was still lower by half percent on the day and
Romania's <> eased 0.7 percent.
Dealers said the early currency falls were natural after
last week's strong gains as the dollar strengthened against the
euro <EUR=>, indicating increased risk aversion in the world.
The news flow about financial problems in the euro zone's
periphery have also caused some volatility in the past months
and could limit the room of the region's currencies to firm,
market players said.
"We will continue to watch how the Greek situation develops
and news about how Iceland will tackle its debt is not positive
either," one Budapest-based dealer said.
"(But) generally, the region is still in a strengthening
channel. Clearly the zloty leads," he said.
OUTPUT FIGURES SURPRISE
The units are seen giving up some ground in the next months
according to a Reuters poll of analysts [], mainly the
forint as Hungary will hold elections in April.
But the zloty and the crown are seen posting strong gains in
the next 12 months.
Czech and Hungarian industrial output figures published on
Tuesday suggested recovery was underway in the recession-hit
region although the outlook remained bumpy. []
Czech output expanded 5.3 percent in annual terms, more than
analysts' 2.5 percent forecast. Hungary's output rose by 3.4
percent, compared to 0.2 percent expected by analysts. <HUIND1>
Hungarian government bonds gave up some ground after a rally
in the past few weeks as yield spreads over Bunds in the euro
zone periphery widened after ratings agency Fitch criticised
Portugal's measures to tackle its debt pile. []
Hungarian yields rose by around six basis points on Tuesday.
Polish short-dated bonds, meanwhile, firmed slightly over
Bratkowski's comments, but the fall in two-year yields was only
3 basis points as new supply will arrive at a tender on
Wednesday, dealers said.
Serbia's central bank continued to sell euros to steer the
dinar <EURRSD=> away from the 100/euro mark.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.559 25.592 +0.13% +2.97%
Polish zloty <EURPLN=> 3.869 3.87 +0.03% +6.07%
Hungarian forint <EURHUF=> 266.78 266.28 -0.19% +1.34%
Croatian kuna <EURHRK=> 7.262 7.262 0% +0.65%
Romanian leu <EURRON=> 4.092 4.085 -0.17% +3.55%
Serbian dinar <EURRSD=> 99.68 99.57 -0.11% -3.81%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +7 basis points to 88bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +122bps over bmk*
10-yr T-bond CZ10YT=RR +5 basis points to +99bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +4 basis points to +407bps over bmk*
5-yr T-bond PL5YT=RR +5 basis points to +324bps over bmk*
10-yr T-bond PL10YT=RR +5 basis points to +279bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +519bps over bmk*
5-yr T-bond HU5YT=RR +5 basis points to +457bps over bmk*
10-yr T-bond HU10YT=RR +4 basis points to +421bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1627 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
Spot FX rates Eastern Europe spot FX <EEFX=>
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
Editing by Susan Fenton/Ruth Pitchford)
