BUDAPEST, Aug 7 (Reuters) - Hungary's forint and the Polish
zloty led a retreat in central Europe on Friday as higher risk
aversion and doubts over the breadth of an economic recovery put
most regional currencies on track for a week of decline.
Data released earlier this week, such as improving Hungarian
output figures and rising Czech exports hinted at a possible
pickup in activity among eastern Europe's export-driven
economies, hammered by a collapse in demand in western Europe.
[]
But a retreat in global stock markets, a surprise interest
rate cut in the Czech Republic, a correction to recent gains in
the zloty, and the break of a key level in the forint put most
regional currencies on a weaker footing by Friday.
At 0715 GMT, the forint <EURHUF=> was down 0.6 percent,
while the zloty <EURPLN=> was off 0.5 percent to the euro.
"We moved clearly above the 270 threshold and that puts the
forint under selling pressure," a Budapest-based currency dealer
said.
"And most market factors are all pointing towards easing:
global stocks are down, the dollar has firmed against the euro
and other emerging market currencies are also down. So I think
we're looking at a range of 270 to 272.40 today."
However, he added that Thursday's better-than-expected U.S.
jobs data could keep sentiment from souring too much and
Friday's monthly employment report, if it is also a positive
surprise, could even turn the market around.
Poland's zloty, seen by markets as central Europe's best
performing currency over a 12-month horizon due to the country's
sounder economic fundamentals [], also edged lower
in a correction to hefty gains posted recently.
"We have a correction on the eur/pln, but the market has
expected it. It's because of the falling euro/dollar and easing
pressures on strengthening currencies in the region," said
Robert Kesicki, dealer at Kredyt Bank in Warsaw.
"I think we can even reach 4.20 (to the euro) but I expect
the Polish unit to come back to its appreciation trend further."
The crown <EURCZK=>, which on Thursday recouped modest
losses after the central bank cut interest rates to a new low of
1.25 percent, despite a slim majority of market players
forecasting no change, was steady.
In rare comments on specific exchange rate levels, Czech
central bank governor Zdenek Tuma told local radio on Friday a
stronger crown exchange rate between 25 and 26 to the euro would
not be a big problem for the domestic economy. []
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.916 25.9 -0.06% +3.23%
Polish zloty <EURPLN=> 4.162 4.14 -0.53% -1.13%
Hungarian forint <EURHUF=> 270.93 269.33 -0.59% -2.72%
Croatian kuna <EURHRK=> 7.331 7.334 +0.04% +0.46%
Romanian leu <EURRON=> 4.212 4.2 -0.28% -4.69%
Serbian dinar <EURRSD=> 93.29 93.29 0% -4.08%
All data taken from Reuters at 0915 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet and
Dagmara Leszkowicz; editing by Mike Peacock)
