* FX mixed, Moody's statement on Portugal weighs on region
* Czech crown touch weaker ahead of no-confidence vote
* Poland's MPC starts two-day meeting
WARSAW, Dec 21 (Reuters) - Central European currencies were
little changed on Tuesday, pressured by a rating agency warning
on Portugal and with the Czech crown down a touch ahead of a
no-confidence vote in the government due later in the day.
News that Moody's put Portugal's ratings on review for a
possible downgrade weighed as the euro -- the CEE region's main
reference currency -- fell to around $1.3144. []
The Czech vote had been seen as a non-event because the
three-party coalition enjoys a safe majority in parliament, but
a decision by junior coalition party Public Affairs late on
Monday to leave cabinet talks stoked uncertainty.
[]
"The move poses a potential risk for more weakening of the
crown, but we can only hope that the smallest ruling party
eventually will come back and support the government," said
Elisabeth Andreew, FX analyst at Nordea.
The crown <EURCZK=>, seen as the region's safe haven, has
been weakening since the start of November and hovered around
its 5-month-low at 25.261 by 0837 GMT.
The Czech vote follows a similar event in Romania, where
Prime Minister Emil Boc's fragile coalition government survived
its third no-confidence vote on Monday, enabling it to press on
with reforms to keep an IMF-led 20 billion euro bailout on
track. []
The leu <EURRON=> was flat against the euro on Tuesday.
Other currencies were little changed, with the Polish zloty
moving around previous closing levels. The central bank's
Monetary Policy Council (MPC) started a two-day meeting on
Tuesday with a decision on interest rates due on Wednesday.
Analysts polled by Reuters expect the 10-strong MPC to keep
interest rates on hold for the 18th consecutive month, but the
bank is seen raising borrowing costs in the first quarter of
2011.
Poland's central bank also releases net inflation data at
1300 GMT.
"If core inflation is above (the forecast) 1.2 percent, the
market is likely to start speculating about the possibility of a
rate hike already in December," said Thulan Nguyen, FX analyst
at Commerzbank in Frankfurt.
"That could give the zloty a temporary boost."
Hungary's forint <EURHUF=> was a touch stronger after the
country's central bank raised rates for the second time in two
months on Monday to 5.75 percent to defend its inflation target.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.261 25.243 -0.07% +4.18%
Polish zloty <EURPLN=> 3.999 3.998 -0.03% +2.63%
Hungarian forint <EURHUF=> 276.18 276.5 +0.12% -2.11%
Croatian kuna <EURHRK=> 7.385 7.383 -0.03% -1.03%
Romanian leu <EURRON=> 4.289 4.289 0% -1.2%
Serbian dinar <EURRSD=> 106.39 106.44 +0.05% -9.88%
*Benchmark is German bond equivalent.
All data taken from Reuters at 0937 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz;
Editing by John Stonestreet)
