* FX rise, stocks add support
* Polish cbank chief says rate hike possible
* GDP in region mostly better, analysts still wary
PRAGUE, Aug 13 (Reuters) - The zloty extended gains on
Friday after Poland's central bank governor said an interest
rate rise was still likely this year, while better economic data
for central Europe boosted other currencies.
Second quarter gross domestic product mostly came out above
expectations in the Czech Republic, Hungary and Romania, with
the latter returning to quarterly growth -- though analysts
expect the return may only be brief. []
Czech GDP grew a touch above forecasts quarter-on-quarter at
0.8 percent. []The data came on the back of the
fastest quarterly growth in 23 years in Germany, a major trading
partner for the region. []
"My estimate is that the figure will be revised up due to
the fact that Germany (in data on Friday) showed much more
significant growth than expected," said Martin Lobotka, analyst
at Ceska Sporitelna.
"The Czech growth was driven by manufacturing, same as in
the first quarter. In an annual comparison, we saw a
significant improvement in market services and that is another
sign that maybe in the second quarter the recession ended even
for consumers."
There are still firm doubts about the second half of this
year, however, as budget cuts kick in across Europe, and
analysts are looking particularly closely at Hungary, which
withdrew last month from talks over IMF support.
Like Romania, Hungary has struggled to get out of recession
and while it grew an annual 1 percent in the second quarter, the
economy still stalled from the first quarter, showing how
fragile its recovery is. []
"This zero quarter-on-quarter growth seems negative news as,
if we look at Czech data, external conditions do not seem to
justify this," said Zoltan Adam, of Takarekbank in Budapest.
"In this respect the data is worse than expectations and is
a warning sign concerning the fragility of the Hungarian
economic recovery."
The forint <EURHUF=> was up 0.4 percent on the day to lead
gains in central Europe, however, bidding at 279.15 to the euro
by 0750 GMT. The Romanian leu <EURRON=> was flat, and the Czech
crown <EURCZK=> edged up a touch to 24.755 per euro.
Stock markets also added support, with up to 1 percent gains
in Budapest <> and Bucharest <>.
The zloty <EURPLN=> added 0.3 percent to 3.986 per euro
after breaking to the weak side of the psychological 4.0 level
overnight. Central bank head Marek Belka said in a radio
interview with Poland's Tok FM Radio that an interest rate hike
from a record low was possible this year. []
Other emerging European central banks are expected to keep
interest rates at record lows into 2011 and beyond.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.755 24.757 +0.01% +6.31%
Polish zloty <EURPLN=> 3.986 3.998 +0.3% +2.96%
Hungarian forint <EURHUF=> 279.15 280.3 +0.41% -3.15%
Croatian kuna <EURHRK=> 7.229 7.229 0% +1.11%
Romanian leu <EURRON=> 4.229 4.228 -0.02% +0.2%
Serbian dinar <EURRSD=> 104.903 104.913 +0.01% -8.6%
All data taken from Reuters at 0951 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 []
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 Patrick Graham)
