* Forint weakens to test key level
* IMF mission begins review of Romania IMF deal
* Poland expected to hold rates steady at 3.5 percent
By Marius Zaharia
BUCHAREST, Oct 28 (Reuters) - The Hungarian forint weakened
to test a key level of 270 per euro on Wednesday and the Polish
zloty also sank ahead of a central bank rate decision later in
the day.
Currencies took a beating on Tuesday, with the Czech crown
hitting a four-month low as the region was hit by a sharp rise
in the dollar, which some analysts said could be the trigger of
a larger correction.
At 0813 GMT, the forint <EURHUF=> was bid at 270.5 per euro,
0.5 percent down on the day, while the zloty <EURPLN=> was 0.4
percent weaker and the Czech crown <EURCZK=> was 0.2 percent
lower from Tuesday's close.
"Someone in London tried to keep the euro/forint north of
270," a dealer said. "I highly doubt they would succeed."
Danske Bank recommended on Tuesday investors to buy the euro
at 268.75 forints for a target of 282, with a stop loss level at
258 on a 1-3 month horizon [].
In Poland, the central bank is widely expected to leave
rates flat at an all-time low of 3.5 percent later on Wednesday.
Meanwhile, the Romanian leu <EURRON=> remained stuck around
4.29 against the euro as fears that political turmoil after a
government collapse earlier this month will hurt the country's
International Monetary Fund deal remained high.
An IMF mission starts its second review of Romania's 20
billion euro aid agreement as parliament holds hearings for
ministers proposed by Prime Minister designate Lucian Croitoru,
who is widely expected to fail getting political backing.
Analysts say emerging European markets are under pressure as
some central banks in the region are expected to cut rates
further, wide budget deficits weigh and concerns grow over IMF
deals in Ukraine, Romania and Latvia.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.25 26.201 -0.19% +1.92%
Polish zloty <EURPLN=> 4.233 4.216 -0.4% -2.79%
Hungarian forint <EURHUF=> 270.5 269.29 -0.45% -2.57%
Croatian kuna <EURHRK=> 7.215 7.218 +0.04% +2.08%
Romanian leu <EURRON=> 4.294 4.29 -0.09% -6.51%
Serbian dinar <EURRSD=> 93.17 93.113 -0.06% -3.96%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +40 basis points to 128bps over bmk*
7-yr T-bond CZ7YT=RR -1 basis points to +101bps over bmk*
10-yr T-bond CZ10YT=RR 0 basis points to +93bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +382bps over bmk*
5-yr T-bond PL5YT=RR +1 basis points to +330bps over bmk*
10-yr T-bond PL10YT=RR 0 basis points to +291bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +623bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +572bps over bmk*
10-yr T-bond HU10YT=RR 0 basis points to +499bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1013 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus; writing by Dagmara Leszkowicz
and Marius Zaharia; editing by Mike Peacock)
