(Repeats story published late on Thursday)
* Zloty/crown trade reversal helps free Czech gains
* Polish unit unmoved by better than expected data
* Stocks lower, limiting FX gains in region
By Jason Hovet and Dagmara Leszkowicz
PRAGUE/WARSAW, Feb 18 (Reuters) - The Czech crown touched
two-month highs on Thursday, while Poland's zloty dipped after
investors closed their PLN/CZK cross positions, overshadowing
the supportive effect of unexpectedly good Polish industrial
output data.
The zloty/crown regional cross trade has been a favourite
among investors in the region, with investors using the Czech
unit's lower rates for funding purposes.
But the zloty had firmed as much as 2 percent year-to-date
against the crown this month and comments by the Czech central
bank's deputy governor on Thursday underlined that its interest
rates will not fall any further. []
"It's only a case of the zloty-crown cross plays and what we
saw today was profit-taking," said Lukasz Wojtkowiak, FX analyst
at Millennium bank. "The zloty did not even react on
better-than-expected industrial output data."
Poland's industrial output in January rose 8.5 percent on an
annual basis, above a 6.2 percent analysts' forecast,
statistics office data showed on Thursday. The seasonally
adjusted output was up 11.1 percent year-on-year.[]
The crown <EURCZK=> rose 0.3 percent by 1448 GMT to bid at
25.745 to the euro, jumping on stop losses after breaking 25.80,
the next technical level that dealers had been targeting.
The zloty <EURPLN=> erased earlier gains to bid 0.4 percent
down, and the Hungarian forint <EURHUF=> was up 0.3 percent. The
Romanian leu <EURRON=> fell 0.2 percent to 4.13 to the euro.
Wojtkowiak also said the region's equity market, all in
negative territory on Thursday, could also have pushed the zloty
lower.
"There's a common thinking that a surprisingly harsh winter
globally, as well as the recent more hawkish comments of the FED
worsened global sentiment," Wojtkowiak said.
Volatility has hit central Europe's markets this month while
investors watched for a more detailed EU response to euro zone
member Greece's rising budget deficits.
The euro, which trimmed its previous losses against the
dollar on Thursday, is central Europe's main reference currency,
and units in the region usually track moves in the euro/dollar.
But that correlation has been broken several times this
month because investors took positions in central European
countries, favouring their better growth prospects and fiscal
positions to those in the euro zone periphery.
The Polish bonds weakened slightly after the output data
release, with yields rising some 2-3 basis points at the
longer-end of the curve.
"It is a normal reaction after the data, as the January
output was stronger than previously expected," said Tomasz
Bielanowicz, dealer at PKO BP in Warsaw.
In the Czech Republic, a 13-week treasury bill auction sold
all its offer on Thursday, while Romania sold a planned 500
million lei in 3-year paper, with the average yields at 7.24
percent, down from 8.0 percent accepted at the previous tender.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.745 25.815 +0.27% +2.23%
Polish zloty <EURPLN=> 4 3.985 -0.38% +2.6%
Hungarian forint <EURHUF=> 270.94 271.65 +0.26% -0.22%
Croatian kuna <EURHRK=> 7.29 7.292 +0.03% +0.26%
Romanian leu <EURRON=> 4.129 4.123 -0.15% +2.63%
Serbian dinar <EURRSD=> 98.759 98.36 -0.4% -2.92%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -7 basis points to 89bps over bmk*
7-yr T-bond CZ7YT=RR -6 basis points to +134bps over bmk*
10-yr T-bond CZ10YT=RR -7 basis points to +115bps over
bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +1 basis points to +388bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +327bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +290bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +1 basis points to +546bps over bmk*
5-yr T-bond HU5YT=RR 0 basis points to +501bps over bmk*
10-yr T-bond HU10YT=RR -1 basis points to +453bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1448 CET.
Currency percent change calculated from the daily domestic
close at 1700 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 Reuters bureaus, writing by Jason Hovet and
Dagmara Leszkowicz; editing by Stephen Nisbet)
