* Zloty up, favoured among peers
* Polish bonds await data
* Hungarian markets look to new govt
(Adds details, fixed income)
By Jason Hovet
PRAGUE, April 17 (Reuters) - The zloty edged up against the
euro to lead central European currencies on Friday, with
investors favouring the Polish unit against peers after the
country moved to secure an IMF credit line this week.
Investors have bought riskier assets in recent weeks, with
funds adding equities to portfolios and helping currencies. But
strategists remain cautious on the recent risk rally, while
central European stocks edged 1-2 percent lower on Friday.
But the zloty is better positioned to reverse its
underperformance against peers, they say, which could impact
other currencies like the Hungarian forint, especially as
markets there size up the new government tasked with leading the
country out of recession.
"More people are favouring cross trades (in the region),
mostly against the forint," said a central European currency
dealer based in Stockholm. "People are looking for higher levels
on the zloty/forint."
The zloty <EURPLN=> rose 0.3 percent against the euro to bid
at 4.279 by 0904 GMT, winning back some losses from a correction
in the previous session.
Polish bonds were quiet before wage data later in the day.
The zloty is up 1.6 percent in the past week after Poland
announced on Tuesday it would apply for $20.5 billion from the
International Monetary Fund's flexible credit line designed to
help fundamentally stronger states out of the financial crisis.
Poland has fared better in the global downturn than other
central European economies that rely more on exports, and
analysts still expect it to eke out growth while neighbours
contract -- unless the recession in the West deepens.
MORE PAIN
In Hungary, one of the worst-hit emerging countries, the
forint <EURHUF=> was down 0.5 percent at 293.68 to the euro.
Prime Minister Gordon Banjai was sworn in this week, and
analysts say he will face many painful fiscal measures.
"For Hungary and the forint, much will depend on general
risk perception on financial markets in the shorter term and on
Banjai's ability to enforce the planned measures in the medium
to long term," Commerzbank wrote on Friday.
"Hungary is not out of the woods just yet."
A Reuters poll on Friday forecast the Hungarian economy
could fall by 5.1 percent in 2009, pushing for lower interest
rates although central bankers will likely keep the base rate at
9.5 percent when they meet next week. []
The Czech crown <EURCZK=>, added 0.2 percent to 26.705 per
euro, while in Romania the leu <EURRON=> was flat at 4.213 ahead
of the orthodox Easter holiday.
The downturn has put an end to years of strong central
European growth funded on foreign investment and credit, putting
currencies on a sharp slide from record highs hit last summer.
The zloty has gained 14.9 percent since nearly touching an
all-time low in mid-February, but is down 21.8 percent since the
second half last year. In the same time, the forint is off 19.8
percent, the crown 11 percent and the leu 13.5 percent.
Strategists expect pressure to remain on currencies as
economic data remains grim, impacting banks and unemployment.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.705 26.767 +0.23% +0.18%
Polish zloty <EURPLN=> 4.279 4.293 +0.33% -3.83%
Hungarian forint <EURHUF=> 293.68 292.30 -0.47% -10.26%
Croatian kuna <EURHRK=> 7.377 7.375 -0.03% -0.16%
Romanian leu <EURRON=> 4.213 4.214 +0.02% -4.71%
Serbian dinar <EURRSD=> 92.713 92.86 +0.16% -3.49%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -4 basis points to 213bps over bmk*
4-yr T-bond CZ4YT=RR -18 basis points to +190bps over bmk*
8-yr T-bond CZ8YT=RR -6 basis points to +288bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -5 basis points to +402bps over bmk*
5-yr T-bond PL5YT=RR -1 basis points to +348bps over bmk*
10-yr T-bond PL10YT=RR +1 basis points to +298bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -6 basis points to +920bps over bmk*
5-yr T-bond HU5YT=RR -7 basis points to +853bps over bmk*
10-yr T-bond HU10YT=RR -11 basis points to +736bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1107 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Mike Peacock)
