(Adds details, fixed income)
PRAGUE, Nov 14 (Reuters) - Romania's leu and Poland's zloty
firmed on Friday to lead a slightly stronger tone in central
European currencies as stocks rallied despite gathering gloom in
the region's economies.
The leu <EURRON=> jumped 1.5 percent to 3.732 per euro by
1029 GMT, recouping more losses from this week when Fitch cut
Romania's credit rating to "junk" status.
In Poland, the zloty <EURPLN=> was up 0.9 percent from
Thursday's domestic close at 3.736 against the euro following an
overnight jump but traded down from morning levels.
"The rebound on the U.S. stock market gives some hope the
downward move on the zloty will stop," said Marcin Bilbin, FX
trader at Bank Pekao SA in Warsaw. "A wave of optimism can be
seen on the financial markets and that's why emerging currencies
are gaining -- among them the zloty."
Central European stocks followed a rally overnight in U.S.
and Asian markets, with the region's bourses up 2-5 percent.
Most currencies in the region were also stronger as November
has proven more stable after a volatile selloff in October.
But many dealers and analysts said weakening was still on
the cards as the euro zone, the region's main trade partner,
slid into recession in the third quarter [], posing
problems for central Europe's export-driven economies.
A wave of third quarter GDP data showed Czech growth
unexpectedly rose slightly but Hungary's tumbled. "The trend is
still (weakening)," a Prague trader said.
Hungary's forint <EURHUF=> gave up gains to inch down to
271.1 per euro and bond yields slipped after the statistics
office reported a sharp slowdown in gross domestic product in
the third quarter.
Annual growth slowed to 0.8 percent in the third quarter
from 2.0 percent in the second, far below analysts' median
forecast of 2.2 percent growth. [].
"The forint has weakened slightly, partly on the weak GDP
data, but volumes are thin and the market is generally lacking
direction," a currency dealer said.
The Czech Republic surprised with a slight pick up in
growth, but analysts said it didn't change the view of the
economy slowing to around 3 percent growth next year after a
pace of 6 percent over the last three years [].
The Czech crown <EURCZK=> weakened to 25.22 per euro, down
0.3 percent, after a recent rally on the back of London buying.
Dealers said liquidity remained low, adding to volatility -- a
trend seen in other markets over the past month.
Markets have calmed since some central and eastern European
states' high exposure to foreign credit spooked investors last
month, sending investors fleeing and Hungary and Serbia, among
others, to seek International Monetary Fund help.
On Thursday, Serbia agreed a 15-month, $516 million stand-by
deal with the IMF [] []. The Serbian
central bank governor said on Friday that growth in country is
likely to slow to 3 percent next year from an expected 7 percent
this year [].
The dinar <EURRSD=> was down a touch at 84.87 per euro.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.223 25.143 -0.32% +4.81%
Polish zloty <EURPLN=> 3.736 3.767 +0.82% -3.76%
Hungarian forint <EURHUF=> 271.090 270.420 -0.25% -7.21%
Croatian kuna <EURHRK=> 7.118 7.120 +0.03% +2.85%
Romanian leu <EURRON=> 3.732 3.790 +1.53% -4.24%
Serbian dinar <EURRSD=> 84.877 84.767 -0.13% -7.77%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +24 basis points to 151bps over bmk*
5-yr T-bond CZ5YT=RR -3 basis points to +136bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +76bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -25 basis points to +1059bps over bmk*
5-yr T-bond HU5YT=RR -24 basis points to +992bps over bmk*
10-yr T-bond HU10YT=RR +21 basis points to +615bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1129 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 []
Spot FX rates
Eastern Europe spot FX <EEFX=> Middle East spot FX <MEFX=>
Asia spot FX <ASIAFX=> Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, writing by Jason Hovet; editing
by David Stamp)
