* Leu hits lowest since July 5 after finmin sacked
* Other FX flat, investors await U.S. jobs report
By Marius Zaharia
BUCHAREST, Sept 3 (Reuters) - The leu hit two-month lows
early on Friday after Romania appointed a little-known official
as finance minister, while improved global sentiment prodded
other central European currencies higher.
Romanian Prime Minister Emil Boc replaced Finance Minister
Sebastian Vladescu with Gheorghe Ialomitianu, an economist from
the ruling party expected to push ahead with policies agreed
with the International Monetary Fund [].
However, Ialomitianu is relatively unknown and a degree of
uncertainty is being felt. By 0732 GMT, the leu <EURRON=> had
fallen half a percent on the day, touching 4.288 per euro, its
lowest since July 5.
"Foreigners don't really like the news," one Bucharest-based
dealer said. "I don't know whether the reshuffle is actually
good or bad, so I just placed my bet on a negative scenario."
Dealers said banks were also covering provisions for
non-performing loans taken in hard currency, dealers said.
"When you are provisioning a non-performing loan (in euros),
it creates a short EURRON position, which you have to cover by
buying the pair and the leu drops," another trader said.
Elsewhere, the Polish zloty <EURPLN=> and the Hungarian
forint <EURHUF=> were 0.1 percent stronger, while the Czech
crown <EURCZK=> was flat.
Appetite for high-yielders rose slightly after U.S. housing
data on Thursday, but investors were waiting for the U.S. jobs
report later in the day before taking more risk on their hands.
Regional investors remained focused on the state of public
finances, particularly in Hungary, where Economy Minister Gyorgy
Matolcsy is expected to deliver a speech about the economy at
about 0800 GMT in Budapest.
Analysts are still divided over whether Hungary's new Fidesz
government will seek a new aid safety net from the European
Union and International Monetary Fund after Oct. 3 municipal
elections, or stick with a pledge to finance itself alone.
"We remain of the view that Hungary is headed towards a very
tense negotiation period when it announces its budget plans mid
October," BNP Paribas said in a note. "We continue to look for
opportunities to build long EURHUF on dips."
In Poland, the government holds a special sitting about next
year's budget draft.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.702 24.707 +0.02% +6.54%
Polish zloty <EURPLN=> 3.964 3.968 +0.1% +3.53%
Hungarian forint <EURHUF=> 284.65 284.85 +0.07% -5.02%
Croatian kuna <EURHRK=> 7.284 7.289 +0.07% +0.35%
Romanian leu <EURRON=> 4.288 4.266 -0.51% -1.18%
Serbian dinar <EURRSD=> 105.67 105.49 -0.17% -9.26%
All data taken from Reuters at 0832 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Marius Zaharia;
Editing by Patrick Graham)
