CEE MARKETS 1-FX lifted by euro, politics cloud leu outlook

                                
 * Currencies firm on easing signals from U.S. Fed 
                                
 * Romanian unions to protest against austerity measures
                                
 
                                
 WARSAW, Sept 22 (Reuters) - The Polish zloty led gains in
emerging European assets in early trade on Wednesday, lifted by
the euro's surge against the dollar after the Federal Reserve
raised expectations it would print more dollars to help the U.S.
economy.
                                
 "Yesterday's Fed statement increased risk appetite, which 
lifted euro/dollar and as a result strengthened the zloty,"
analysts at BPH bank wrote in a note.
                                
 After a policy meeting on Tuesday the Fed said it stood
ready to provide more support for the U.S. economy.
[ID:nN20109053] 
                                
 That encouraged investors to pick up riskier emerging market
assets. The Polish zloty <EURPLN=> was 0.5 percent stronger
against the euro, the region's main reference currency, and rose
to a 20-week high against the dollar at 2.9560 by 0718 GMT.
Hungary's forint <EURHUF=> was 0.4 percent stronger and the
Czech crown <EURCZK=> was up a touch versus the common currency.
                                
 The Romanian leu <EURRON=> was 0.1 percent stronger against
the euro, though political risks have clouded the outlook for
the currency after the powerful opposition said this week it
would file a no-confidence vote against the government next
month.
                                
 Some 22,000 protesters were expected to attend a labour
union rally in Bucharest on Wednesday against the centrist
coalition government's austerity measures.
                                
 The measures, which include tax hikes and wage cuts, are a
key factor in securing Romania's IMF-led 20 billion euro aid
package but have battered the government's popularity.
                                
 Elsewhere, Polish Finance Minister Jacek Rostowski said in a
radio interview the general government deficit could be above
100 billion zlotys this year, much higher than previous
estimates despite an improving economy. Analysts said the figure
amounted to rather more than 7 percent of gross domestic
product. [ID:nWSF009505]
                                
 "The figure is quite big, mainly due to local governments'
shortfalls, but there are no market implications so far because
of overall sentiment and inflows of capital into Poland," said
Ernest Pytlarczyk, chief analyst at BRE bank in Warsaw.
                                
 Warsaw had recently estimated the general government
deficit, which includes local government and state agencies'
shortfalls, would amount to 6.9 percent of GDP.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  24.626   24.644   +0.07%   +6.87%
Polish zloty     <EURPLN=>   3.933    3.953   +0.51%   +4.35%
Hungarian forint <EURHUF=> 278.95   279.92    +0.35%   -3.08%
Croatian kuna    <EURHRK=>   7.283    7.284   +0.01%   +0.36%
Romanian leu     <EURRON=>   4.252    4.257   +0.12%   -0.34%
Serbian dinar    <EURRSD=> 105.19   105       -0.18%   -8.85%
All data taken from Reuters at 0918 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 Susan Fenton)