CEE MARKETS 3-FX shake off grim GDP data, week ends in loss

                                
 * Czech, Hungary, Romania GDP data show recession
                                
 * FX steady to end losing week
                                
 * Risk sentiment stable, main driver for FX now
                                
 
  (Updates throughout)
                                
 By Dagmara Leszkowicz and Jason Hovet
                                
 WARSAW/PRAGUE, May 15 (Reuters) - Central European
currencies held steady against the euro on Friday in the face of
grim GDP data throughout the region, with a slight calm
returning to markets after a week of losses.
                                
 The Hungarian forint <EURHUF=> edged up to 286.95 per euro,
0.4 percent higher from Thursday's domestic close, but was set
to post its first losing week in a month. Romania's leu
<EURRON=> led losses with a 0.4 percent fall.
                                
 The Hungarian, Romanian, Slovak and Czech economies all
posted larger than expected first quarter contractions on
Friday, showing the toll the global downturn was taking on the
export-driven region.
                                
 Central European policymakers and business leaders meeting
in London said the region faces at least another year of
economic difficulties, and signs now point more to stabilisation
rather than recovery. [ID:nLF951952]
                                
 The economic slide has put new pressure on emerging European
economies, with ballooning deficits knocking back euro adoption
hopes likely by several years.
                                
 Currencies, struggling to get back on firmer ground despite
gaining since March, mostly shrugged off the data, and dealers
said investors stayed reluctant ahead of the weekend.
                                
 "There were already expectations that growth data was going
to be bad," said strategist Jon Harrison of Dresdner Kleinwort.
                                
 "We had had a good run over the past month or so... but
there has been some scaling back as people realise we may not
necessarily be on the way up (in the economy)."
                                
 Central Europe's stocks tracked western peers higher on
Friday as financial stocks led gains, with Prague's index <.PX>
rising almost 2 percent, while the Czech crown <EURCZK=> dipped
0.1 percent to bid at 26.905 to the euro.
                                
 
                                
 REALITY CHECK
                                
 Data showed Hungary's and Romania's economies both slumped
by an annual 6.4 percent, and the Czech economy fell a record
3.4 percent in the first quarter, but better than neighbouring
Slovakia, which fell 5.4 percent. [ID:nLF943809]
                                
 In Germany, the region's main export market, GDP contracted
by a much larger than expected 3.8 percent. [ID:nLF581891]
                                
 Poland, whose more closed economy is seen better off, is due
to publish its first quarter GDP data on May 29, with analysts
forecasting around 1 percent expansion. 
                                
 The zloty <EURPLN=>, which is off 2.5 percent in the past
week, bid 0.3 percent up on Friday.
                                
 "The data out this morning was terrible," a central European
currency trader in Stockholm said. "But it's already been a
rough week... and people are reluctant ahead of the weekend."
                                
 The forint rose to a nearly four-month high last week, up
more than 13 percent from a record low of 317.45 hit in March.
                                
 But it has led a sharp reversal in currencies this week with
a 4 percent fall after risk sentiment shifted following weak
U.S. retail sales data on Wednesday, which dashed many hopes for
a quick rebound in the global economy.
                                
 Czech Prime Minister Jan Fischer said on Friday keeping the
government's central state budget target gap would be
"extraordinarily difficult." His Polish counterpart, Donald
Tusk, also signalled Friday the central government budget
deficit might rise past target. [ID:nBSD000192] [ID:nLF656585]
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   26.905   26.87   -0.13%    -0.56%
Polish zloty     <EURPLN=>    4.455    4.468  +0.29%    -7.63%
Hungarian forint <EURHUF=>  286.95   288.00   +0.37%    -8.15%
Croatian kuna    <EURHRK=>    7.378    7.347  -0.42%    -0.18%
Romanian leu     <EURRON=>    4.185    4.168  -0.41%    -4.08%
Serbian dinar    <EURRSD=>   93.84    94.727  +0.95%    -4.65%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR   +2 basis points to  147bps over bmk*
4-yr T-bond   CZ4YT=RR    -9 basis points to  +196bps over bmk*
8-yr T-bond   CZ8YT=RR   +5 basis points to  +277bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1539 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/Jason Hovet)