(Adds detail, Hungarian bonds data, updates prices)
By Marius Zaharia
BUCHAREST, Jan 20 (Reuters) - The Hungarian forint hit a new
all-time low versus the euro in volatile trade on Tuesday, a day
after the central bank cut rates by 50 basis points, while the
Polish zloty flirted with new lows ahead of industry data.
Hungary's central bank cut its key rate to 9.5 percent on
Monday, reversing two-thirds of an emergency 300 basis points
hike in October, and signalled it was ready for further easing
if financial stability allowed [].
Analysts said the forint's weakness may limit the room for
easing, but central bank vice-governor Ferenc Karvalits said the
falling forint was not a concern for the bank and the monetary
council was only watching long-term trends.
At 1047 GMT, the forint <EURHUF=> fell 0.8 percent to 286.5
per euro. Data on wages picking up in November []
had little impact on the forint.
"It was probably not good for the forint that the central
bank said it did not really matter where the euro/forint was,"
one Budapest-based dealer said.
The forint was on a rollercoaster on Tuesday, trading
between 284.55 and a record low of 288.62 per euro.
"I think there are no technical levels for the forint around
these levels, and it will produce big swings, high volatility,"
a currency dealer said.
The Polish zloty <EURPLN=> fell 0.9 percent from Monday's
close and traded near its lowest since end-2004 as monetary
easing became more probable after Monday's below-consensus wage
data on [].
However, a Polish central banker was quoted as saying on
Tuesday the bank should move in a way that will not speed up the
zloty weakening [].
Polish markets were eyeing industrial data later in the day,
which will be key for regional sentiment and for the central
bank's future rate decision, analysts said.
"Deeper than expected fall in industrial output in December
... could contribute to further zloty falls," BPH analysts said.
The Czech crown <EURCZK=> fell 0.4 percent, but played
steady after November retail sales came in worse than expected,
encouraging the view that the Czech economy is starting to
decline []. The Romanian leu <EURRON=> fell 0.4
percent.
In Serbia, whose deputy prime minister said will avoid
recession this year [], the dinar <EURRSD=> bucked
the trend and rose 0.2 percent.
Regional currencies have been pummelled over the last months
as the deepening global financial crisis forced central banks to
cut rates and signal more easing, while recession fears mounted.
The EBRD said on Tuesday that economic growth in emerging
Europe will fall close to zero [].
Analysts expect a 50 basis points rate cut in Poland in
January and in the Czech Republic next month, while Romania,
which so far has been outside the regional trend, is also seen
cutting rates by 25-50 basis points.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.767 27.65 -0.42% -3.65%
Polish zloty <EURPLN=> 4.332 4.295 -0.85% -5.01%
Hungarian forint <EURHUF=> 286.5 284.3 -0.77% -8.01%
Croatian kuna <EURHRK=> 7.393 7.393 0% -0.38%
Romanian leu <EURRON=> 4.308 4.293 -0.35% -6.82%
Serbian dinar <EURRSD=> 94.149 94.328 +0.19% -4.96%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +15 basis points to 115bps over bmk*
4-yr T-bond CZ4YT=RR +8 basis points to +99bps over bmk*
8-yr T-bond CZ8YT=RR -3 basis points to +98bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -19 basis points to +757bps over bmk*
5-yr T-bond HU5YT=RR -19 basis points to +704bps over bmk*
10-yr T-bond HU10YT=RR -23 basis points to +553bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1247 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Marius Zaharia;
editing by Stephen Nisbet)
