WARSAW, May 15 (Reuters) - Central European currencies held
steady on Friday in the face of grim GDP data from throughout
the region.
The Hungarian, Romanian, Slovak and Czech economies all
posted larger than expected falls in the first quarter, but
dealers said investors stuck to the sidelines as currencies had
already traded on a weaker footing for much of the week.
"The data out this morning was terrible," a central European
currency trader in Stockholm said. "But it's already been a
rough week... and people are reluctant ahead of the weekend."
Central Europe's stocks tracked western peers higher on
Friday as financial stocks led gains.
At 0745 GMT the Czech crown <EURCZK=> was 0.1 percent down
against the euro while the forint <EURHUF=> and the Polish zloty
<EURPLN=> was moving around its closing level at 287.8 and 4.47
respectively to the euro.
Romania's leu <EURRON=> fell 0.5 percent to 4.188 per euro.
Data showed Hungary's and Romania's economies both slumped
by 6.4 percent, worse than expectations for -5.9 percent and
-2.6 percent respectively.
The Czech economy fell a record 3.4 percent in the first
quarter, but did not perform as badly as neighbouring Slovakia,
which fell 5.4 percent.
"The GDP numbers are further confirmation that Hungary is in
a very deep recession. We now expect Hungarian GDP to drop by at
least 8 percent year on year in 2009," said Lars Christensen,
chief analyst at Danske Bank.
"Despite the very weak numbers we do not expect the central
bank to cut rates any time soon as inflation remains well above
the bank's inflation target and there is a significant risk of a
further sell-off in the forint."
The forint had risen last week to a nearly four-month high,
up more than 13 percent from its lowest level of 317.45 to the
euro in March.
But it reversed sharply this week with a shift in risk
sentiment following weak U.S. retail sales data on Wednesday,
that dashed hopes for a quick rebound in the global economy.
Elsewhere in the region, Poland's statistics office said on
Thursday inflation jumped to an almost six-month high, cementing
expectations the central bank's Monetary Policy Council (MPC) is
likely to hold fire with rates in May. []
Poland is due to publish its first quarter GDP data on May
29. Analysts polled by Reuters expect the country's economy
expanded by 1 percent in this period.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.9 26.87 -0.11% -0.55%
Polish zloty <EURPLN=> 4.471 4.468 -0.07% -7.96%
Hungarian forint <EURHUF=> 287.81 288.00 +0.07% -8.43%
Croatian kuna <EURHRK=> 7.378 7.347 -0.42% -0.18%
Romanian leu <EURRON=> 4.188 4.168 -0.48% -4.15%
Serbian dinar <EURRSD=> 94.46 94.727 +0.28% -5.27%
All data taken from Reuters at 0946 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 Chris Pizzey)
