* FX lower as euro, fiscal concerns weigh on region
* Hungary bond auction due at 1030 GMT
(Adds fixed income)
WARSAW, Feb 10 (Reuters) - Central European currencies fell
on Thursday, tracking a weak euro, with the Hungarian forint and
Polish zloty leading losses on concerns over fiscal policy in
Budapest and Warsaw.
A lack of fiscal reform in Hungary and Poland to rein in
budget deficits has been pressuring the forint and the zloty for
months. []
"Obviously weakness across the region is caused by moves on
the eurodollar. But currencies, particularly those from
countries with fiscal problems, are really under pressure now,"
said Thu Lan Nguyen, FX analyst at Commerzbank.
"As for Hungary, concerns have eased somewhat, but we are
rather sceptical and don't share this optimism."
By 1000 GMT the zloty <EURPLN=> had extended its morning
losses and was down 0.5 percent. Hungary's forint <EURHUF=> was
down 0.4 percent, while the Czech crown <EURCZK=> and Romania's
leu <EURRON=> had each edged 0.1 percent lower.
Hungary's government is expected to present fiscal reform
plans later this month while Poland's cabinet plans to overhaul
its pension system to rein in public debt, but some analysts say
those measures will not be enough to boost market confidence.
The International Monetary Fund recently urged Hungary to
implement spending cuts and reforms to reduce its budget gap.
[]
Hungary's government is targeting a budget deficit of 2.94
percent of GDP this year, down from a target of 3.8 percent last
year, to be achieved by temporary new taxes on banks, retail,
energy and telecommunications companies and the diversion of
private pension fund payments back into state coffers.
Poland's government says it expects its budget deficit to
drop below the EU's required 3 percent of GDP ceiling in 2013
after hitting 3.4 percent in 2012, though many analysts are
sceptical about this timeframe.
On the bond market, Polish paper weakened on Thursday along
with the zloty. Dealers attributed this to a rise in bond yields
in the heavily indebted euro zone periphery that has fanned
risk-aversion across Europe.
In Hungary, bonds auction results are due at 1030 GMT.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.24 24.217 -0.09% +3.14%
Polish zloty <EURPLN=> 3.924 3.905 -0.48% +0.87%
Hungarian forint <EURHUF=> 272.65 271.47 -0.43% +1.95%
Croatian kuna <EURHRK=> 7.412 7.413 +0.01% -0.43%
Romanian leu <EURRON=> 4.258 4.252 -0.14% -0.59%
Serbian dinar <EURRSD=> 103.26 103.01 -0.24% +2.58%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -14 basis points to 24bps over bmk*
7-yr T-bond CZ7YT=RR +2 basis points to +61bps over bmk*
10-yr T-bond CZ9YT=RR +5 basis points to +74bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +5 basis points to +361bps over bmk*
5-yr T-bond PL5YT=RR +6 basis points to +336bps over bmk*
10-yr T-bond PL10YT=RR +6 basis points to +303bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1100 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets:
All emerging market news []
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 [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
Editing by Hugh Lawson)
