* Forint gains on PLN/HUF profit taking
* Polish CPI in line with f'cast, cements view of rate hike
* Crown at late-2008 high, dampens Czech rate outlook
* Poland taps euro bond issue, adds 1 bln euro
(Updates prices, adds PL Eurobond size)
By Jason Hovet
PRAGUE, Jan 13 (Reuters) - The Hungarian forint rose on
Thursday, gaining at the zloty's expense as investors took
profit on the currency pair following the zloty's recent jump on
expectations of an interest rate rise.
The zloty <EURPLN=> retreated 1 percent to 3.875 to the euro
by 1550 GMT, extending half percent losses in the afternoon
following data showing the current account deficit widened more
than expected. []
The Polish currency had shot to a nine-month high this week
after comments from a number of policymakers raised interest
rate expectations with a Reuters poll this week showing 17 of 29
analysts expect a rate hike next Wednesday. That marked a shift
from earlier this month, when only two of 21 analysts polled
forecast a January rise. []
The forint <EURHUF=> gained 0.1 percent, off session highs
and stuck at its 275 per euro resistance level. The zloty/forint
cross <PLNHUF=R> was quoted at 71.03 forints per zloty on
Thursday after a Wednesday high of 72.229.
"The forint may outperform now because the zloty might have
been slightly overbought yesterday," a Budapest FX dealer said.
"My feeling is that the main cause is that more money flowed
into Hungarian government bonds (at auctions) today than
expected."
Hungary's debt agency sold 55 billion forints -- 10 billion
more than planned -- at three bond auctions on Thursday, with
the yield on the five-year bond down and tracking a drop in
yields in secondary markets. [] <HUISSUE>
Poland also ventured into the debt market, issuing 1 billion
euros in new debt, reopening a 10-year Eurobond
<0#PL054388209=>. It was priced at 150 basis points above
mid-swaps, higher than 120 bps seen when the bond was issued in
September. []
Polish inflation accelerated in December, data showed on
Thursday, in line with a 3.1 percent forecast. The figure
cemented expectations the central bank would start tightening
policy.
Analysts said the forint's rise may be short-lived. "We
would be cautious to ride on a short EUR/HUF strategy and would
rather see the dips as a (euro) buying opportunity," 4Cast said.
CZECH CROWN DIPS
The Polish currency firmed past 3.85 this week -- the level
at which the central bank intervened last April for the first
time since introducing a free float in 2000.
The Czech crown <EURCZK=> dipped 0.3 percent to 24.396 per
euro, off a more than two-year high hit late in Wednesday's
session. The Romanian leu <EURRON=> lost 0.2 percent.
Stocks in the region were mixed.
If Poland raises rates it would follow Hungary, which has
lifted its benchmark rate by 50 basis points in two moves since
November. Hungarian central bank minutes on Wednesday showed
divisions and increased uncertainty about a rate decision later
this month. []
Czech forward markets price in a rate hike in six months.
Rates rose this week after central banker Pavel Rezabek said a
rise in inflation may prompt the bank to hike interest rates
sooner than late-2011 implied in its forecast. []
Komercni Banka, which this week recommended receiving a
two-year Czech interest rate swap <CZKAM6PR2Y=> against paying
six-month PRIBOR <CZK6MD=>, said in a daily trading note that
expectations still looked excessive. []
"With the crown the strongest since late 2008, it seems to
be pretty much unrealistic to expect a rate hike now," it said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.396 24.318 -0.32% +2.48%
Polish zloty <EURPLN=> 3.875 3.838 -0.95% +2.14%
Hungarian forint <EURHUF=> 275.17 275.33 +0.06% +1.02%
Croatian kuna <EURHRK=> 7.395 7.398 +0.04% -0.2%
Romanian leu <EURRON=> 4.259 4.251 -0.19% -0.61%
Serbian dinar <EURRSD=> 104.89 105.32 +0.41% +0.99%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -12 basis points to 66bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +85bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +90bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -15 basis points to +618bps over bmk*
5-yr T-bond HU5YT=RR -16 basis points to +567bps over bmk*
10-yr T-bond HU10YT=RR -12 basis points to +473bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1647 CET.
Currency percent change calculated from the daily domestic
close at 1700 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 []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Jason Hovet; editing
by Catherine Evans and Susan Fenton)
