PRAGUE, Nov 19 (Reuters) - The Polish zloty and Hungarian
forint led a retreat in central European currencies on Thursday
after weaker equities and a rebounding dollar pulled investors
away from riskier emerging markets.
Romania's leu bucked the trend to hold near a five-week high
ahead of the first round of presidential elections on Sunday and
with the risk of central bank intervention hanging over the
currency.
The leu <EURRON=> was steady to bid at 4.275 to the euro by
0821 GMT, while the zloty <EURPLN=> lost 0.6 percent ahead of
industrial output data later in the day. The forint <EURHUF=>
fell 0.7 percent to 267.25 to the euro.
The Czech crown <EURCZK=>, often seen as a safe haven bid in
the region, dipped 0.3 percent to 25.485 to the euro.
"The region has been benefitting from a weakening dollar and
strengthening equities, but that looks over now," a Prague-based
dealer said. "It is still risk on/risk off."
The crown, zloty and forint have posted as much as 4 percent
gains this month, propelled by dollar weakness giving investors
cheap funding options, signs of an economic turnaround in some
of central Europe's hardest-hit economies, and, in the forint's
case, a higher yield carry.
However, investors globally cut gains on Thursday, pushing
the dollar up around half a percent again the euro, central
Europe's main reference currency. []
In Romania, markets were looking to weekend elections, with
the eventual winner given the responsibility of choosing the
next prime minister who will lead talks with the IMF.
The International Monetary Fund said on Wednesday aid
discussions would continue, and a mission would return to the
country after the political situation was "clarified."
The IMF halted a review of Romania's 20 billion euro aid
package on Nov. 6 after the centrist government was toppled last
month. [] []
"I see no other reason why (the leu) firmed," said a trader.
"Some say it's to have it firmer at the time of election."
The leu has been stuck in a tight range since October, while
the government has run into trouble selling its debt. On
Thursday, Romania's finance ministry tenders 850 million lei
worth of three-year treasury bonds.
Investors will also watch for regular auctions of Hungarian
bonds, which have been supported on local markets by
expectations of monetary policy easing.
Hungarian and Romanian interest rates are more than double
those of Poland and the Czech Republic, with the latter already
seen at the end of a more than year-long easing campaign.
The next move in Czech interest rates could either be a cut
or a hike and it should not be assumed they were at their lowest
despite a risk inflation could rise above expectations, central
bank Vice Governor Mojmir Hampl said on Wednesday. []
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.485 25.42 -0.26% +4.98%
Polish zloty <EURPLN=> 4.127 4.101 -0.63% -0.29%
Hungarian forint <EURHUF=> 267.25 265.46 -0.67% -1.38%
Croatian kuna <EURHRK=> 7.314 7.315 +0.01% +0.7%
Romanian leu <EURRON=> 4.275 4.272 -0.07% -6.1%
Serbian dinar <EURRSD=> 94.451 94.27 -0.19% -5.26%
All data taken from Reuters at 0923 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Mike Peacock)
