BUDAPEST, May 28 (Reuters) - The forint and the Polish zloty
led gains in central European markets on Friday while the Czech
crown underperformed due to uncertainty over the outcome of
elections which start on Friday.
The zloty was also supported by Thursday's announcement that
the International Monetary Fund's Marek Belka was the candidate
to head Poland's central bank to replace former Governor
Slawomir Skrzypek, who was killed in a plane crash last month.
[]
"The improvement of global sentiment is favourable for the
Polish zloty and if no worsening occurs, there are chances that
the Polish zloty will end the week not only below 4.10 against
the euro, but even close to 4.00," BPH bank said in its morning
note to clients.
AT 0717 GMT, the zloty <EURPLN=> was up 0.35 percent and the
Hungarian forint <EURHUF=> rose 0.5 percent. The Romanian leu
<EURRON=> was 0.1 percent stronger while the Czech crown was
flat versus the euro <EURCZK=>.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For stories on the Czech election, see []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Market players fear the outcome of Czech parliamentary polls
could lead to a long period of political wrangling that may
delay much-needed fiscal cuts.
Czechs start voting on Friday for a new administration which
needs a mandate to push through key economic reforms, after the
year-long rule of a technocrat government which was praised for
competence but lacked power to push through reforms.
Opinion polls predict a tight result that may lead to
lengthy coalition talks and a weak government that may not have
the power to push through reforms.
"The election results are expected to be a close call... and
a potential political stalemate could make the approval of
fiscally restrictive measures more difficult," CIB Bank said in
a daily note on Friday.
"The impact on bonds would probably be slightly negative in
case the left wins," Dalimil Vyskovsky, an interest rate trader
at Komercni Banka wrote in a morning note.
"The right getting the majority might be short-term positive
but more likely neutral for government debt instruments."
The leu edged up early on Friday, as risk appetite continued
to improve, but markets remained wary of possible challenges for
the government's austerity plans, crucial to secure further IMF
support.
A confidence vote on the package is expected some time next
week, when unions also plan a general strike.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.599 25.6 0% +2.81%
Polish zloty <EURPLN=> 4.055 4.069 +0.35% +1.21%
Hungarian forint <EURHUF=> 274.29 275.57 +0.47% -1.44%
Croatian kuna <EURHRK=> 7.263 7.263 0% +0.64%
Romanian leu <EURRON=> 4.15 4.155 +0.12% +2.11%
Serbian dinar <EURRSD=> 102.81 102.703 -0.1% -6.74%
All data taken from Reuters at 0917 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 Krisztina Than; Editing by Ruth Pitchford)
