* Yuan news drives zloty to 1-month high, other FX up
* Hungary central bank seen holding interest rates
* Romania to auction T-bills, 7 pct seen as yield cutoff
PRAGUE, June 21 (Reuters) - The Polish zloty jumped to a
one-month high, leading a rise in central European currencies
and stocks on Monday as investors snapped up riskier assets
after China allowed the yuan to rise.
China let the yuan rise to its strongest since July 2005,
easing tensions with the West. []
"EMEA should receive a boost from the increased risk
appetite from the Chinese move. In particular it should benefit
commodity currencies such as the rand and to a lesser extent
CE-3 (zloty, forint and crown)," SEB said in a morning trade
note.
Stock markets rose 1.5-2.5 percent led by Bucharest <>.
The Hungarian forint <EURHUF=> rose 0.6 percent to a 2-1/2 week
high, while the Romanian leu <EURRON=> added a similar amount
and the Czech crown <EURCZK=> gained 0.3 percent.
The zloty <EURPLN=> jumped 0.8 percent, also coming after
the first round of a presidential election on Sunday.
Acting head of state Bronislaw Komorowski won the most
votes, setting up a runoff vote against Jaroslaw Kaczynski, twin
brother of the former president who was killed in a plane crash
in April. []
The yuan news, though, was the main driver in a region that
is struggling to shake worries over the euro zone's debt crisis,
despite lower debt levels and better growth prospects.
Hungary's central bank is expected to keep its main interest
rate on hold at a record low of 5.25 percent later on Monday in
its first meeting since government officials rattled markets
with comments suggesting the country's debt problems were close
to Greece. []
Romania tenders 1.2 billion lei worth of one-year bills on
Monday and traders widely expect the finance ministry to reject
bids at yields above 7 percent, as it has done at similar
tenders, which would mean it sells a lot less than planned.
Uncertainty over the government's ability to enforce sharp
state wages and pensions cuts has led to a rise in yields on the
secondary debt market in recent weeks.
The ministry has rejected all bids or scaled back issuance
in tenders since May. []
"They will accept everything that is below 7 percent which
means they will probably raise 0.5 billion lei," said one trader
in Bucharest.
"In the long term, this has proved to be a poor strategy.
Yields are close to record lows in Romania and so the ministry
should issue long-term debt as much as possible. But they are
not."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.66 25.737 +0.3% +2.56%
Polish zloty <EURPLN=> 4.024 4.054 +0.75% +1.99%
Hungarian forint <EURHUF=> 277.65 279.29 +0.59% -2.63%
Croatian kuna <EURHRK=> 7.199 7.2 +0.01% +1.53%
Romanian leu <EURRON=> 4.217 4.24 +0.55% +0.48%
Serbian dinar <EURRSD=> 103.97 103.527 -0.43% -7.78%
All data taken from Reuters at 0934 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Ruth Pitchford)
