* Zloty still trading close to 14-month highs
* Markets eye ECB rate decision later in session
By Sam Cage
BUCHAREST, March 4 (Reuters) - Emerging Europe's currencies
edged lower in early trade on Thursday, giving up some of the
previous day's gains, when Poland's zloty was boosted by hawkish
comments from its central bank governor.
Markets will likely keep a wary eye on the European Central
Bank, which is set to hold interest rates at a record low level
of 1.0 percent on Thursday and detail the next steps in its
gradual withdrawal of emergency lending. []
Regional currencies have enjoyed a strong run in the last
few weeks and have been further helped by a new Greek austerity
plan, which has supported investors' risk appetite.
"I think it should be quiet today on the currency market,
and the zloty should stabilise at around 3.90-3.92 against the
euro," said one Warsaw-based dealer.
Polish central bank governor Slawomir Skrzypek said
policymakers should consider tightening rates given the central
bank's most recent projection for inflation over the next two
years. []
At 0822 GMT, the zloty <EURPLN=> was down 0.15 percent from
Wednesday's close at 3.908 per euro, edging back from 14-month
highs of around 3.89 hit during the previous session after
Skrzypek's comments.
"We are now looking for a first rate hike in Q4 2010
following the latest NBP inflation forecasts. Let's see what
kind of rhetoric comes from the next MPC meeting," said
Cheuvreux economist Simon Quijano-Evans.
The Czech central bank is also expected to shift to rate
hikes later this year while analysts believe Hungary and
Romania, where rates are higher, still have room to cut.
The head of Romania's central bank said on Thursday he was
concerned the leu could rise too far as the southeast European
country struggles to recover from recession. []
The leu <EURRON=> was down 0.07 percent, the Hungarian
forint <EURHUF=> fell 0.12 percent and the Czech crown <EURCZK=>
was 0.18 percent lower.
Hungary posted a trade surplus of 375.4 million euros in
December <HUTRDF=ECI> in line with a preliminary estimate
released last month, the Central Statistics Office (KSH) said on
Thursday. []
"I think the region will stay strong, though there could be
a small correction in the EURHUF to around 268," a dealer said.
"The zloty is a shade weaker ... today I don't expect any big
firming."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.78 25.733 -0.18% +2.09%
Polish zloty <EURPLN=> 3.908 3.902 -0.15% +5.02%
Hungarian forint <EURHUF=> 266.2 265.88 -0.12% +1.56%
Croatian kuna <EURHRK=> 7.266 7.267 +0.01% +0.59%
Romanian leu <EURRON=> 4.089 4.086 -0.07% +3.63%
Serbian dinar <EURRSD=> 99.68 99.553 -0.13% -3.81%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +1 basis points to 102bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +117bps over bmk*
10-yr T-bond CZ10YT=RR +1 basis points to +95bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +398bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +336bps over bmk*
10-yr T-bond PL10YT=RR +2 basis points to +299bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -5 basis points to +563bps over bmk*
5-yr T-bond HU5YT=RR -7 basis points to +512bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +461bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1022 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Sam Cage; editing by John Stonestreet)
