(Adds fixed income, detail)
WARSAW, Jan 6 (Reuters) - The Polish zloty continued its
gains on Tuesday as the sentiment towards global stock markets
improved, while other currencies were mixed with the Hungary's
forint losing around 0.3 percent against the common currency.
The region's currencies started 2009 weaker against the
common currency with the zloty <EURPLN=> hit the hardest, after
global financial turmoil crashed into emerging Europe, wiping
out strong gains from the first half of 2008.
However, the zloty continued its strengthening on Tuesday
with a more than one percent rise against the euro. Also
Romania's leu <EURRON=> firmed ahead of the country's central
bank's meeting.
"If the positive sentiment on global markets remains, we may
expect the zloty to strengthen further," said Lukasz Wojtkowiak,
FX analyst at ING bank in Warsaw.
Another dealer said the market had expected the currency to
retreat from some of its losses and added that Tuesday's
comments from the Polish central bank's deputy governor in
largely favour of euro adoption, could support such a move.
"Comments on euro could help the zloty to strengthen,
however the main story is improving sentiment," dealer said.
Earlier in the day, the Polish central bank's deputy head
Witold Kozinski said the advantages of adopting euro outweighed
disadvantages, however entering the ERM-2 rate exchange
mechanism already this year -- as planned by the government --
was not a good idea. []
In Romania the currency started to gain, tracking the zloty,
but dealers said demand for hard currencies in the country was
still big.
"The leu is rangebound for the moment, it tried to track the
zloty rise earlier but it failed because there is still domestic
demand (for euros) from importers," one dealer said.
Dealers said volumes were thin as most investors were
waiting for the outcome of the central bank meeting expected
later in the day.
In Hungary, the forint <EURHUF=> was 0.34 percent down to
the euro. However, "we must remember that the forint has moved
in a range in the last month of the year and the trend generally
has not changed," Wojtkowiak said.
In opposition to the currency, the Hungarian bond market
improved slightly and traders said the market was slowly coming
back to life, with buyers appearing mainly on the short-end of
the curve.
"The long end is, for the time being, quiet, and I think it
will remain so for a while ... it seems that there is money in
the system now, but (investors') confidence in the markets has
not been rebuilt yet," a fixed income trader said.
The Czech crown <EURCZK=> was broadly unchanged on Tuesday
and dealers said talk of an expected cabinet reshuffle that
could include the finance minister's post was having limited
impact on markets [].
Elsewhere in the region, Serbia's dinar <EURRSD=> hit its
record-low against the euro, with traders citing strong demand
for hard currencies by oil and telecom monopolies.[]
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.417 26.42 +0.01% +1.26%
Polish zloty <EURPLN=> 4.067 4.112 +1.09% +1.17%
Hungarian forint <EURHUF=> 267.15 266.25 -0.34% -1.37%
Croatian kuna <EURHRK=> 7.301 7.299 -0.03% +0.87%
Romanian leu <EURRON=> 4.055 4.058 +0.07% -1.01%
Serbian dinar <EURRSD=> 91.323 89.525 -2.01% -2.06%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +2 basis points to 175bps over bmk*
5-yr T-bond CZ5YT=RR -6 basis points to +159bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +112bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +341bps over bmk*
5-yr T-bond PL5YT=RR -15 basis points to +283bps over bmk*
10-yr T-bond PL10YT=RR -14 basis points to +228bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -46 basis points to +777bps over bmk*
5-yr T-bond HU5YT=RR -56 basis points to +717bps over bmk*
10-yr T-bond HU10YT=RR +2 basis points to +531bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0934 CET.
Currency percent change calculated from the daily domestic
close at 1500 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 []
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(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz)
