CEE MARKETS 3-FX mostly ease as worries over euro zone return

                                
 * Zloty, forint ease as risk aversion returns
                                
 * Polish zloty supported by rate hike calls in longer-term
                                
 * Czech, Romanian data gives slight support to CZK, RON
                                
 
  (Updates throughout)
                                
 By Jason Hovet and Dagmara Leszkowicz
                                
 PRAGUE/WARSAW, Nov 8 (Reuters) - The Polish zloty and
Hungary's forint eased on Monday, as renewed worries over the
euro zone periphery pushed the euro down versus the dollar,
while better-than-expected data gave a slight boost to the Czech
crown and Romania's leu.
                                
 The U.S. Federal Reserve's decision last week to buy $600
billion in U.S. Treasury bonds in a second round of quantitative
easing gave a boost to emerging Europe, but the region has since
given up some gains as the euro, its main reference currency,
has weakened.
                                
 "Risk aversion is back in the game," said one Warsaw-based
dealer. "Fears over heavily-indebted euro zone peripheral
countries returned and investors are trimming their risk by
selling riskier assets."
                                
 Five-year credit default swaps widened across the region,
with the Polish CDS up almost 6 basis points to 117, Hungary's
some 5 basis points to 292.3 and Romania's CDS up 4 points to
265.1.
                                
 By 1458 GMT the Polish zloty <EURPLN=> led losses, falling
0.3 percent versus the euro, while Hungary's forint <EURHUF=>
was down 0.2 percent.
                                
 The Czech crown <ERUCZK=> was virtually flat to the euro,
while Romania's leu <EURRON=> edged some 0.1 percent higher.
                                
 Romanian industrial output rose in September, data showed,
and output growth in the Czech Republic was stronger than
expected, giving a slight boost to those countries' currencies.
[ID:nLDE6A707N], [ID:nLDE6A70BA]
                                
 Also, Romania sold the planned amount of one-year T-bills
with the average yield rising to 7.07 percent, but analysts said
it was too early to say whether the finance ministry has
abandoned a self-imposed yield cap of 7 percent. [ID:nLDE6A71K7]
                                
 According to a Reuters poll published last Wednesday, the
region's units are expected to rebound in the longer term,
thanks to an economic recovery and rising investor flows into
emerging markets as a result of the Fed easing [CEEU/POLL].
                                
 
                                
 HIKES SUPPORT ZLOTY
                                
 Economists at Commerzbank said the Polish zloty is also
supported by recent comments of the central bank's Monetary
Policy Council members on interest rate hikes.
                                
 "This (appreciation trend on the zloty) is likely to
continue over the coming weeks, as markets have ... already
priced in a 50 basis points rate rise over the next three
months," Commerzbank wrote in a note.
                                
 Interest rates in Poland have remained unchanged for 16
months, with the key interest rate at a record low of 3.5
percent.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  24.561   24.563   +0.01%   +7.15%
Polish zloty     <EURPLN=>   3.924    3.913   -0.28%   +4.59%
Hungarian forint <EURHUF=> 274.5    273.85    -0.24%   -1.51%
Croatian kuna    <EURHRK=>   7.346    7.347   +0.01%   -0.5%
Romanian leu     <EURRON=>   4.286    4.288   +0.05%   -1.13%
Serbian dinar    <EURRSD=> 107.01   106.97    -0.04%  -10.4%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -5 basis points to  78bps over bmk*
7-yr T-bond   CZ7YT=RR   +2 basis points to  +103bps over bmk*
10-yr T-bond   CZ9YT=RR   +6 basis points to  +113bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    0 basis points to  +389bps over bmk*
5-yr T-bond   PL5YT=RR   +2 basis points to  +372bps over bmk*
10-yr T-bond PL10YT=RR   +4 basis points to  +326bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +6 basis points to  +564bps over bmk*
5-yr T-bond   HU5YT=RR   +5 basis points to  +531bps over bmk*
10-yr T-bond   HU10YT=RR +10 basis points to  +472bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1558 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Stephen Nisbet)