BUDAPEST, July 9 (Reuters) - Central European currencies
extended the weeks' gains on Friday as an overnight rise by
Asian shares and the euro's strength underpinned risk appetite
and the Czech Republic released strong industrial output data.
But dealers said a retreat of the Romanian leu <EURRON=> and
opening losses in Hungarian equities <> indicated caution
ahead of the weekend, and the market watched the euro/dollar
<EUR=>, which was dancing around the key 1.27 level.
Czech industrial output surged 16.9 percent in annual terms
in May, above analysts' forecast of 15 percent. This followed
strong May output figures in Poland and Hungary.
The crown <EURCZK=> briefly strengthened to 25.366 against
the euro after the figures to retreat later. At 0742 GMT it was
0.2 percent firmer than late Thursday levels.
The region's output figures benefitted from a low base and
reflected stronger then expected recovery in exports, but
analysts were cautious, saying that a possible slowdown in the
euro zone in the second half of 2010 can curb export growth.
"External factors will be important in today's trade, which
means (investors will eye) whether the positive mood in past
two days favouring riskier assets lasts," said Lukas Ruzicka, an
FX dealer at J&T Banka.
"For now it looks like it could last, and I expect the crown
at stronger levels around 25.40, possibly breaking that level."
A Reuters poll of analysts showed on Thursday that the
region's currencies could firm in the next 12 months, led by the
zloty <EURPLN=> which was seen surging by about 8 percent.
[]
The Polish unit gained 0.3 percent on Friday to 4.076
against the euro.
Poland's new central bank Governor Marek Belka projected
robust 3 percent growth for 2010 and 3.5 percent for 2011, but
his forecasts were below earlier projections by the bank and the
government. []
Hungarian figures released on Friday showed a trade surplus
of 428.8 million euros in May. []
The forint <EURHUF=> firmed 0.3 percent to the euro to
280.1.
"The 280 level is a serious resistance which looks to
withhold the forint," one Budapest-based dealer said.
"Some players who pushed up the forint from 285 may be
closing positions. If the euro can stay firmer than 1.27 to the
dollar, the forint can test 280 again, while in the other
direction 281.50 and 282.30/50 seem providing solid support."
Romania's leu eased 0.2 percent, giving up some of its gains
from earlier in the week when it was boosted by the
International Monetary Fund approving the disbursement of the
latest tranche of the country's 20 billion euro bailout deal.
Prospects for the recession-hit economy have significantly
worsened after cuts in public wages and a hike in value added
tax and analysts now expect gross domestic product to shrink by
a further 2.5 percent in 2010. []
While June inflation due on Monday is expected to remain
within the central bank's target band, the VAT hike should push
prices significantly higher later this year, subdue local demand
and prolong recession.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.37 25.411 +0.16% +3.74%
Polish zloty <EURPLN=> 4.076 4.087 +0.27% +0.69%
Hungarian forint <EURHUF=> 280.1 280.8 +0.25% -3.48%
Croatian kuna <EURHRK=> 7.186 7.19 +0.06% +1.71%
Romanian leu <EURRON=> 4.236 4.227 -0.21% +0.03%
Serbian dinar <EURRSD=> 103.74 103.69 -0.05% -7.58%
All data taken from Reuters at 0942 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Sandor Peto; Editing
by Toby Chopra)
