CEE MARKETS 3-FX down on rising dollar, Austria banks worries

                                
 * FX eases, moves on eurodollar key for the region
                                
 * Concerns over Austria's banks affect CEE FX
                                
 * Budget concern weighs on crown ahead of cbank meeting
                                
 
                                
 (Adds fresher quotes, prices)
                                
 BUDAPEST/WARSAW, Dec 15 (Reuters) - Central European
currencies fell on Tuesday, with the crown leading losses as
concerns over Austrian banks led to euro selling against the
dollar.
                                
 Flows into the safe haven dollar often signal dips in risk
appetite, which weakens assets in emerging markets including the
European Union's eastern members.
                                
 The euro dropped versus the dollar and European shares
dipped after Austria put one of its major banks on a watch list
a day after it nationalised Hypo Group Alpe Adria.
[ID:nLDE5BD00D] 
                                
 Concerns have grown after an Austrian newspaper said another
bank, Oesterreichische Volksbanker, was on regulators'
watchlists.
                                
 "The dollar is strengthening, risk appetite is falling and
liquidity on the market is really low, moving the market
downwards," said one Warsaw-based dealer.
                                
 "Worries over Austria's banks, which own several major
commercial banks in Central Europe, are a key element fueling
the weakening of the currencies."
                                
 At 1515 GMT the crown <EURCZK=> was 1.3 percent weaker to
the euro, while the Polish zloty <EURPLN=> and Hungary's forint
<EURHUF=> fell 1.1 percent and 0.9 percent respectively.
                                
 The bond market was also weaker on Tuesday, with Hungary's
paper yields rising some 7 basis points.
                                
 Neither Hungary's industrial output data for October nor
Poland's inflation for November affected markets, dealers said.
                                
 
                                
 RATE MEETINGS EYED, BUDGETS A RISK
                                
 The 2010 budget approved by the Czech parliament carries the
risk of a widening in the public sector gap to nearly 6 percent
of GDP, prompting Finance Minister Eduard Janota to threaten to
quit, although he finally agreed to stay on.
                                
 "As for the fundamental reasons, the crown is (still)
pressured by an approval of the high (2010 budget) deficit and
all the talk of the potential resignation of Janota," said David
Sykora, an FX dealer at bank CSOB.
                                
 Too much state spending is one of the top risks highlighted
by analysts in their notes about the region's 2010 outlook.
                                
 The Czech and Polish central banks are seen keeping interest
rates on hold at their last 2009 meetings, eyeing inflation
pressures, but Hungary is predicted to cut rates further to help
its recession-hit economy. [ID:nLDE5BD1QC]
                                
 The leu <EURRON=> was broadly unchanged after a Romanian
court declared President Traian Basescu victor on Monday in a
closely fought election, handing him a second 5-year term and
the power to end a political crisis that has threatened an
IMF-led aid deal. [ID:nLDE5BD25V]
                                
 Romania's finance minister said a third, 1.5 billion euro
loan tranche from the International Monetary Fund may come as
early as January. [ID:nWLA0717] The Fund started a three-day
visit to Bucharest on Monday.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>  26.2     25.835   -1.39%   +2.11%
Polish zloty     <EURPLN=>   4.195    4.149   -1.1%    -1.91%
Hungarian forint <EURHUF=> 276.84   274.23    -0.94%   -4.8%
Croatian kuna    <EURHRK=>   7.283    7.274   -0.12%   +1.13%
Romanian leu     <EURRON=>   4.245    4.245       0%   -5.43%
Serbian dinar    <EURRSD=>  95.7     95.87    +0.18%   -6.5%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR   +1 basis points to  110bps over bmk*
7-yr T-bond   CZ7YT=RR    -1 basis points to  +103bps over bmk*
10-yr T-bond   CZ10YT=RR    -7 basis points to  +81bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +1 basis points to  +382bps over bmk*
5-yr T-bond   PL5YT=RR    -2 basis points to  +337bps over bmk*
10-yr T-bond PL10YT=RR    -2 basis points to  +302bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +1 basis points to  +566bps over bmk*
5-yr T-bond   HU5YT=RR    -2 basis points to  +511bps over bmk*
10-yr T-bond   HU10YT=RR  -2 basis points to  +446bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1515 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
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 (Reporting by Reuters bureaus, Writing by Gergely
Szakacs/Sandor Peto/Dagmara Leszkowicz; Editing by Victoria
Main)