BUCHAREST, March 23 (Reuters) - Romania's leu was close to
10-month highs against the euro in early trade on Wednesday
after what analysts said was a verbal intervention by the
central bank, while Hungary's forint extended gains.
The Polish zloty <EURPLN=> and Czech crown <EURCZK=> were
near flat against the euro, which eased before Portugal's
parliament votes on government austerity plans later. The
minority Socialist administration could fall if it loses the
vote on the measures, which are aimed at avoiding a bailout.
The euro is eastern Europe's main reference currency and
regional currencies often track its moves.
The leu <EURRON=> rose 0.1 percent to 4.124 per euro by 0859
GMT, pushing towards a 4.111 high hit last May, after the
central bank told Reuters on Tuesday recent currency strength
was underpinned by economic fundamentals. []
"The statement could be considered as a verbal intervention,
and the reason for the sharp move in the pair (was that) market
players interpreted it as implying the (central bank) is more
than comfortable with current EUR/RON levels," said ING's
Nicolaie Alexandru-Chidesciuc.
One dealer said he was looking for consolidation at around
4.12-4.14. "Flows are pretty good and yesterday I guess was the
largest traded volume for this year," he added.
The forint <EURHUF=> rose for the fifth successive session,
firming past 270 against the euro.
Dealers said the move reflected a shift from zlotys into
forints as investors revise expectations both of an imminent
Polish interest rate hike and of lower rates in Hungary.
Expectations that Hungary will issue a new benchmark dollar
bond after investor roadshows in the United States and Europe
are completed were also supporting the currency.
"The rate hike in Poland seems to be postponed while our new
Monetary Council is not expected to start cutting rates like
crazy," a forex dealer in Budapest said. []
The zloty rose briefly after data showing retail sales rose
by a much higher-than-expected 12.2 percent year-on-year in
February but later gave up its gains. []
"The data, especially growth in such segments as furniture,
confirms the economy continues to grow and a recent slowdown in
sales was only temporary," said Piotr Kalisz, chief economist at
Citibank in Warsaw.
The Czech Finance Ministry aims to sell 7 billion crowns at
auction of its floating rate notes maturing in 2016
<CZ1002331=>, and dealers expected good demand for the paper
which they said looked cheap.
Dealers also said a bond with a floating coupon could be
interesting for investors if interest rates are set to rise.
The auction results should be released after 1100 GMT.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.426 24.394 -0.13% +2.35%
Polish zloty <EURPLN=> 4.041 4.034 -0.17% -2.05%
Hungarian forint <EURHUF=> 269.79 270.2 +0.15% +3.04%
Croatian kuna <EURHRK=> 7.38 7.374 -0.08% 0%
Romanian leu <EURRON=> 4.124 4.127 +0.07% +2.64%
Serbian dinar <EURRSD=> 103.23 103.22 -0.01% +2.61%
All data taken from Reuters at 0959 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Sam Cage and Reuters bureaus; Editing by
Catherine Evans)
