CEE MARKETS 2-FX weaker, crown dips ahead of rate decision

                                
 * Czech c.bank decision due at 1200 GMT
                                
 * Leu down after recent rally
                                
 * Market waits on EU summit
                                
 * Regional stock markets gain
                                
 
                                
(Adds fixed income, detail)
                                
 By Dagmara Leszkowicz
                                
 WARSAW, March 25 (Reuters) - Emerging Europe's currencies
were slightly weaker on Thursday, with the Czech crown edging
down ahead of a central bank decision on interest rates later in
the day.
                                
 The market expects the key Czech rate to remain flat at 1.0
percent. The central bank (CNB) is expected to raise rates this
year, but continued sluggish domestic demand and inflation below
a 2 percent target may slow the pace of monetary tightening.
                                
 "The recent strength of the crown is making life easier for
the CNB," analysts at Commerzbank wrote in a note. "A further
appreciation of the crown would probably even be unwelcome for
the central bank."
                                
 By 1009 GMT the crown <EURCZK=>, Poland's zloty <EURPLN=>
and Hungary's forint <EURHUF=> each shed some 0.1 percent.
                                
 Regional stocks were all in the black on Thursday, while
Romania's leu <EURRON=> fell in morning trade, losing some 0.3
percent against the common currency after it hit a 14-month high
on Wednesday. 
                                
 Some market players attributed its recent strengthening to
remittances sent from Romanian workers living abroad.
                                
 Dealers said they expected Romania's central bank to
intervene to weaken the unit if the leu firming continues to
gather pace. The central bank has entered the market in the
past, but does not comment on when it does.
                                
 The crown has gained more than 4 percent since the start of
the year, while the zloty has strengthened 5.5 percent and the
forint some 2.4 percent as investors bought up the region's
assets on the back of a better economic recovery and more stable
debt positions than some euro zone states.
                                
 
                                
 GREECE WEIGHS
                                
 European Union members gather later on Thursday for a
two-day summit, where the market hopes the bloc's leaders will
reach a last-minute agreement on how to help heavily-indebted
Greece.
                                
 Efforts to arrange a special meeting of the 16 euro
countries had failed by late Wednesday, with France and Germany
discussing what role the International Monetary Fund might play
in any Greek rescue and what form extra contributions by euro
zone states could take. [ID:nLDE62N2R1]
                                
 The euro dived against the dollar in the past days and
continues to suffer due to uncertainty over possible aid
measures for Greece.
                                
 Some analysts said a tight correlation between the region
and the common currency had loosened in recent days.
                                
 "Whatever decision is taken on Greece, it will be bad for
the euro," one dealer in Bucharest said. "The euro/dollar
correlation with CEE weakened, but it will resume at some
point."
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  25.362   25.341   -0.08%   +3.77%
Polish zloty     <EURPLN=>   3.888    3.884   -0.1%    +5.56%
Hungarian forint <EURHUF=>  263.77   263.43   -0.13%   +2.49%
Croatian kuna    <EURHRK=>   7.258    7.261   +0.04%   +0.71%
Romanian leu     <EURRON=>   4.061    4.047   -0.34%   +4.34%
Serbian dinar    <EURRSD=>   99.72   99.747   +0.03%   -3.85%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    +3 basis points to  +84bps over bmk*
7-yr T-bond   CZ7YT=RR    -2 basis points to  +106bps over bmk*
10-yr T-bond  CZ10YT=RR   -2 basis points to  +97bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -1 basis points to  +377bps over bmk*
5-yr T-bond   PL5YT=RR    -1 basis points to  +302bps over bmk*
10-yr T-bond PL10YT=RR    -1 basis points to  +239bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR     0 basis points to  +469bps over bmk*
5-yr T-bond   HU5YT=RR    -1 basis points to  +414bps over bmk*
10-yr T-bond  HU10YT=RR   -2 basis points to  +382bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1109 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 [EMRG] 
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 [CEN]  Economic Data Guide <ECONGUIDE>
Official rates [GLOBAL/INT]  Emerging Diary [EMRG/DIARY]  
Top events [M/DIARY]  Diaries [DIARY] Diaries Index [IND/DIARY] 
                                
 (Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz; Editing by Ruth Pitchford, John Stonestreet)