(Corrects day in paragraphs 2, 7)
* Zloty leads losses, hit by regional cross trades
* Other FX steady or edging down
By Marius Zaharia
BUCHAREST, April 24 (Reuters) - The Polish zloty lost
further ground to the euro early on Friday, as investors dumped
the currency against its peers after official estimates
signalled Poland's euro entry target may be too ambitious.
On Thursday, a central banker said Poland will fail next
year to meet the inflation requirement for euro entry, while a
top aide to the prime minister said the budget deficit may reach
4.6 percent of GDP in 2009, well above EU's ceiling.
[]
"Positioning and fiscal newsflow are a genuine near term
hurdle and we see some scope of a re-test of 5.80 on PLN/CZK in
the coming week," UniCredit said in a note.
The zloty jumped to a three-month high last week on the back
of an expected IMF flexible credit line, but a reversal of
global sentiment and bearish local news hit back on the unit
this week.
By 0711 GMT, the zloty <EURPLN=> had fallen 0.6 percent,
while the Hungarian forint <EURHUF=>, the Czech crown <EURCZK=>
and the Romanian leu <EURRON=> had remained virtually unchanged.
"Cross trades hit the zloty, while the region remains mostly
flat," one dealer said. "Some funds were long PLN/HUF and some
big banks were long PLN/CZK. They are stopping losses after a
poor news flow ... that casts doubt over their ERM-2 entry."
In Hungary, which on Thursday sold almost all bonds offered
in the three auctions [], the debt agency said it
expects no big improvement in the bond market this year unless
there is a significant shift in global sentiment.
But Hungary said it would continue with regular sales after
demand was several times oversubscribed on Thursday, in what
analysts said it was another positive signal following well-bid
auctions in the Czech Republic and Poland this month.
Despite a slight pick-up in regional debt markets,
strategists remain gloomy over the outlook of emerging Europe,
as growth forecasts worsen rapidly and concerns mount over
financial stability.
While pressure is there to stay, the zloty is still seen
outperforming, despite leading losses over the past days, as
Poland is helped by better fundamentals and has the IMF-credit
line and the option to convert EU funds in the currency market
as tools to defend the unit.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.912 26.884 -0.1% -0.59%
Polish zloty <EURPLN=> 4.493 4.468 -0.56% -8.41%
Hungarian forint <EURHUF=> 298.25 298.2 -0.02% -11.63%
Croatian kuna <EURHRK=> 7.42 7.376 -0.59% -0.74%
Romanian leu <EURRON=> 4.241 4.244 +0.07% -5.34%
Serbian dinar <EURRSD=> 94.216 94.22 0% -5.03%
*Benchmark is German bond equivalent.
All data taken from Reuters at 1011 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 []
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Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
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(Reporting by Reuters bureaus, Writing by Marius Zaharia;
Editing by ...)
