BUDAPEST, July 26 (Reuters) - Eastern European currencies
opened the week firmer on Monday, supported by more benign
sentiment after Europe's banking stress tests showed no
unexpected problems in the region.
Even the forint <EURHUF=>, the region's underperformer on
last week's turmoil following a suspension of talks between
Hungary and its lenders, recouped some of Friday's losses and
was up 0.65 percent at 0727 GMT.
The forint dropped on Friday as rating agency Standard &
Poor's and Moody's warned they might downgrade the country's
sovereign debt. []
Dealers in Budapest said the currency was expected to trade
in wide ranges with increased volatility until the dust settles
and more details become known about the 2011 budget and the
Hungarian government's policy plans.
"I expect a range between 283-290 to the euro this week as
there is high event risk in the forint ... and many players are
waiting for a trigger to sell," a dealer said.
"There is a generally better risk taking sentiment today."
The Czech crown, which gained last week on the volatility in
the forint and zloty, edged closer to the 25 per euro level,
which dealers said may prove resistant.
"Overall the global mood on emerging markets is getting
better," a Prague dealer said. "People will try to test (below)
the 25 per euro level, but we should hold (above) it."
"Now that the uncertainty regarding the bank stress test is
over, we expect euro/crown to test the 25 mark. A sustainable
breach of the level seems unlikely though as the central bank
had started verbal interventions at that level in April,"
Commerzbank added.
The Polish zloty <EURPLN=> was up 0.7 percent, while the
Romanian leu <EURRON=> was 0.2 percent higher.
The Polish zloty was gaining in early Monday trade, reaching
its strongest levels against the euro in a month.
The bank test results, announced after the close of markets
on Friday, showed only seven of 91 banks failed -- five small
Spanish banks, Germany's state-rescued Hypo Real Estate and
Greece's ATEbank. No listed bank failed the tests.
[]
"As regards Central Eastern European countries, the two
Hungarian Banks (OTP and FHB) and the Polish bank PKO passed the
test very comfortably, with very high Tier 1 ratios even after
the stress," said Unicredit in a daily note.
"The top 7 international banking groups present in Central
Eastern Europe (UniCredit, RZB, Erste, OTP, SocGen, IntesaSP,
KBC) also passed the stress exercise. In summary, there is no
specific regional issue about the local banking sector - good
news for the region in this sense."
Budapest stocks <.BIX> were up 0.6 percent at 0726 GMT,
while the Prague bourse <> gained 0.6 pct and Warsaw <>
rose 0.3 pct. Hungary's main lender OTP <OTPB.BU> was up 1.25
percent, outperforming the market.
The leu <EURRON=> also edged higher, tracking its regional
peers and the euro with no local factors to trade on.
Markets were eyeing the start of an IMF mission to review
Romania's 20 billion euros aid package and a tender to sell 750
million lei in 6-month treasury bills.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.122 25.109 -0.05% +4.76%
Polish zloty <EURPLN=> 4.041 4.068 +0.67% +1.56%
Hungarian forint <EURHUF=> 285.1 286.94 +0.65% -5.17%
Croatian kuna <EURHRK=> 7.243 7.248 +0.07% +0.91%
Romanian leu <EURRON=> 4.254 4.264 +0.24% -0.39%
Serbian dinar <EURRSD=> 105.38 105.3 -0.08% -9.01%
All data taken from Reuters at 0925 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaux, writing by Krisztina Than;
Editing by Ruth Pitchford)
