* Crown, forint benefit from long zloty cross unwinds
* Forint extends post-election rally, bonds correct
* Polish cbank watched after weekend plane disaster
* Prague stocks jump, near pre-crisis levels
(Adds Hungary bonds, Prague shares, details)
By Dagmara Leszkowicz
WARSAW, April 14 (Reuters) - The Czech crown hit a
seven-month peak and the Hungarian forint neared a four-week
high on Wednesday as emerging European assets rose, but
continued risk of intervention kept a lid on the Polish zloty.
Strategists expect a recovery in central European exports
will help fuel gains this year in the region's currencies which
have already rallied since the beginning of 2010.
The Polish central bank surprised markets last Friday with
its first intervention since introducing a free float in 2000 as
it aimed to temper the zloty's 6 percent rise year-to-date,
which could start hindering exports and the overall economy.
While markets may again test the bank's policy, analysts say
the zloty appreciation will likely cool and the unit is down 1
percent since hitting a 16-month high a week ago.
The reversal has given a boost to peers the crown and forint
as investors square long zloty positions against them.
The forint and Hungarian bonds have also rallied this week
after a sweeping first round election win for the centre-right
Fidesz party, winning a near two-thirds majority needed to push
through vital reforms. []
"There could be some profit-taking on the zloty/crown trade;
it looks like some people are squaring long positions on the
Polish zloty," a Prague dealer said.
By 0917 GMT the zloty <EURPLN=> was a touch up against the
euro, trading at 3.867, and the crown <EURCZK=> had eased off
session highs but was up 0.14 percent on the day to bid at
25.079 per euro, bringing its 2010 gains to 5 percent.
[]
The forint <EURHUF=> added 0.2 percent, while bond yields
ticked up after dropping almost 40 basis points in the two
sessions since Sunday's election.
POLAND RESILIENT
Polish markets have held up following the Saturday crash of
a government plane that killed President Lech Kaczynski, central
bank Governor Slawomir Skrzypek and other senior officials.
However, dealers said worries of intervention in the market
weighed and investors were watching as officials rush to fill
the vacuum left by the governor's death.
The bank's acting governor Piotr Wiesiolek told daily Gazeta
Wyborcza on Wednesday the country should name a new central bank
head without unnecessary delays. []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
* For stories on the Polish crash and its aftermath please
double click on []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
"The zloty should be stronger today, looking at the level of
the euro against the dollar, but a risk of intervention halts
its appreciation," said Jakub Wiraszka, dealer at BRE bank.
In Romania, whose central bank has also been suspected of
intervening to cool currency gains this year, the leu <EURRON=>
rebounded 0.2 percent to bid at 4.135 per euro.
The Prague bourse <> jumped more than 2 percent to levels
last seen at the start of the financial crisis in September
2008, led by a 14 percent rise for miner New World Resources
<NWRSsp.PR> after it booked much higher contract prices over the
next year. []
Central Europe's improving economic outlook has driven the
region's assets to multi-month highs this year.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.079 25.113 +0.14% +4.94%
Polish zloty <EURPLN=> 3.867 3.871 +0.1% +6.13%
Hungarian forint <EURHUF=> 263.15 263.6 +0.17% +2.74%
Croatian kuna <EURHRK=> 7.257 7.27 +0.18% +0.72%
Romanian leu <EURRON=> 4.135 4.144 +0.22% +2.48%
Serbian dinar <EURRSD=> 99.44 99.37 -0.07% -3.58%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +8 basis points to 68bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +65bps over bmk*
10-yr T-bond CZ10YT=RR -2 basis points to +57bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +5 basis points to +416bps over bmk*
5-yr T-bond HU5YT=RR +5 basis points to +357bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +325bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1121 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
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Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
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(Reporting by Reuters bureaus, Writing by Jason Hovet;
Editing by Toby Chopra/Susan Fenton)
