* FX off lows, but stay under pressure as risk trimmed
* Stocks lose around 1 percent, track peers
PRAGUE, March 15 (Reuters) - Central European currencies
recovered some ground early on Tuesday after overnight losses,
but markets stayed under selling pressure as Japan's nuclear
crisis sparked an exit from riskier assets.
Stock markets in emerging Europe lost around 1 percent in
early trade. The Polish zloty led currency losses, bid down 0.5
percent and just off a 3-1/2 month low hit before the opening.
Dealers said investors were selling risky assets in the face
of a potential catastrophe after an earthquake-hit nuclear power
plant exploded and sent send low levels of radiation floating
towards Tokyo. []
"Fear of further damage at the Japanese nuclear plants is
causing investors to close their positions on emerging markets,"
said Robert Kesicki, a Warsaw-based FX dealer at Kredyt Bank.
"Apart from the zloty, the forint is also weakening. I think
zloty will stay in a 4.02-4.10 per euro range today."
By 0912 GMT, the zloty was bid at 4.062 to the euro. In
Hungary, where local markets are closed, the forint <EURHUF=>
lost 0.3 percent from Monday's European close.
The Czech crown <EURCZK=> and Romanian leu <EURRON=> lost
0.1 percent.
Central European currencies have been under pressure in
recent weeks as the outlook on the pace of monetary policy
tightening becomes a little hazier. []
The Czech crown failed to get a boost from comments from
central banker Eva Zamrazilova, who has been in the minority in
recent meetings on raising interest rates from record lows.
She said her view has not changed, but expectations the bank
would rush to begin monetary tightening were dealt a blow on
Monday with news that Kamil Janacek, another of the rate setters
advocating a rate hike, would miss the meeting this month.
[]
The zloty was also pushed weaker on Monday by news the
Polish finance ministry is looking to carry out interest rate
swaps in which it would receive a fixed rate, due to the
prospect of the transaction capping yields. []
"It seems as if the Polish zloty could be heading above 4.00
against the euro more permanently on the back of a general
worsening of Polish fundamentals -- especially concerns over
Polish public finances," Danske Bank said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.347 24.319 -0.12% +2.68%
Polish zloty <EURPLN=> 4.062 4.037 -0.62% -2.56%
Hungarian forint <EURHUF=> 272.95 272.04 -0.33% +1.84%
Croatian kuna <EURHRK=> 7.386 7.386 0% -0.08%
Romanian leu <EURRON=> 4.184 4.179 -0.12% +1.17%
Serbian dinar <EURRSD=> 102.5 102.49 -0.01% +3.34%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +17 basis points to 25bps over bmk*
7-yr T-bond CZ7YT=RR +4 basis points to +68bps over bmk*
10-yr T-bond CZ9YT=RR +5 basis points to +75bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1014 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
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Catherine Evans)
