(Changes dateline, new throughout)
BUDAPEST, Sept 24 (Reuters) - Most of Central Europe's
currencies eased on Thursday as global markets remained in the
grip of liquidity concerns, awaiting developments from the
United States on a $700 billion financial bailout plan.
The pace of the past week's currency weakening slowed and
the gains of stocks in the U.S. improved sentiment but
currencies in the region stayed in the red except for the
firming Hungarian forint<EURHUF=D2>, an earlier underperformer.
Investors were also assessing yield levels after rate
meetings by three central banks in the region and ahead of the
Hungarian central bank's meeting on Monday.
Czech, Polish and Romanian policy makers kept interest rates
on hold on Wednesday and Thursday and Hungary's bank is expected
to hold fire as well, but both the Czech Republic and Hungary
are seen cutting interest rates later this year.
The Czech crown <EURHUF=D2> whose strength contributed to a
rate cut last month led the losses after Thursday's rate meeting
followed by comments from central bank Governor Zdenek Tuma
which signalled more rate cuts to come.
It traded at 24.394 to the euro at 1431 GMT, weaker than the
24 per euro level which analysts see as too strong for the
central bank.
"Things have settled down some and the crown is coming back
to the previous (weakening) trend," said a Prague-based trader.
Appetite for currencies in the region remained weak amid the
global uncertainty, and Poland's zloty <EURPLN=> eased 0.12
percent against the euro even though after Wednesday's central
bank meeting analysts expect at least one more Polish rate hike.
At 3.331 it was off the day's lows, while Hungary's forint
firmed 0.31 percent to 239.90.
Dealers said investors from the West, concerned over
liquidity prospects, lowered their limits for trade in emerging
European currencies and market players preferred neutral
positions, keeping the forint close to 240.
In the past months the currency of Hungary, which has an
embattled minority government, was more volatile and shed more
than the zloty and the crown.
"There is uncertainty over liquidity, foreign investors are
not interested so much (in currencies in the region) and do not
speculate as much as earlier," one Budapest-based dealer said.
While currencies weakened, government bonds were mixed in
the region, but they narrowed the yield spreads over
corresponding German bunds.
---------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.394 24.336 -0.24% +7.94%
Polish zloty <EURPLN=> 3.331 3.327 -0.12% +7.49%
Hungarian forint <EURHUF=> 239.900 240.650 +0.31% +5.12%
Croatian kuna <EURHRK=> 7.114 7.112 -0.03% +2.9%
Romanian leu <EURRON=> 3.672 3.678 +0.16% -2.56%
Serbian dinar <EURRSD=> 76.687 76.425 -0.34% +2.63%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -13 basis points to 7bps over bmk*
5-yr T-bond CZ5YT=RR -8 basis points to +1bps over bmk*
10-yr T-bond CZ9YT=RR -11 basis points to +23bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -9 basis points to +245bps over bmk*
5-yr T-bond PL5YT=RR -10 basis points to +197bps over bmk*
10-yr T-bond PL10YT=RR -9 basis points to +157bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -14 basis points to +532bps over bmk*
5-yr T-bond HU5YT=RR -6 basis points to +492bps over bmk*
10-yr T-bond HU10YT=RR +1 basis points to +369bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1631 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Reporting by Reuters buros, writing by Sandor Peto)
