PRAGUE, Oct 15 (Reuters) - The Polish zloty led regional
gains on Thursday as central European currencies held stronger
levels on the back of rising equity markets.
The zloty <EURPLN=> tested a clear break below 4.20 to the
euro which it has flirted with over the past week, and shook off
a potential first setback in the government's privatisation
plans to gain 0.4 percent by 0733 GMT.
"Technically, a break below 4.20 may trigger some action,"
SEB analysts wrote in a morning report. "In sharp contrast to
many financial assets it remains 20 percent below its pre-Lehman
level. That doesn't suit for one of the fundamental winners."
Central European bourses followed peers up, with Warsaw
<> and Budapest <> up around half a percent, building
on gains after the U.S. Dow Industrial index <> jumped above
10,000 points for the first time in a year. []
Hungary's forint <EURHUF=> rose 0.2 percent to 266.7 per
euro, while the Czech crown <EURCZK=> and Romanian leu <EURRON=>
drifted sideways, with the latter clinging near a seven-month
low after a government collapse this week.
On Wednesday, President Traian Basescu rejected a proposal
to endorse a government of technocrats. He instead called on the
opposition and the Democrat Liberals of outgoing Prime Minister
Emil Boc to offer an experienced economist as prime minister to
help fight Romania's recession. []
"We can expect more downfalls if political instability is
prolonged," said one dealer with a foreign bank in Bucharest.
Rising risk appetite in global markets has buoyed central
European assets this week even as political instability rises
and governments struggle to control growing budget deficits.
But analysts have warned political uncertainty in Romania
along with spillover fears from Latvia, which is wrangling over
public spending cuts needed to protect an IMF aid package and a
currency peg, could again weigh on the region. []
Poland, the only country in the region to avoid recession,
is counting on privatisation funds to keep its budget gaps from
triggering debt levels that, if breached, would require steep
mandatory spending cuts.
The Polish treasury ministry said on Wednesday that sole
bidder German utility RWE <RWEG.DE> would not make a binding
offer for Polish peer ENEA <ENAE.WA>, putting the sale in doubt
for this year. []
"A clear blow to the dynamics of the privatisation process
and an Achilles heel of the whole budget programme," Cheuvreux
economist Simon Quijano-Evans said in a Thursday note.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.861 25.868 +0.03% +3.45%
Polish zloty <EURPLN=> 4.197 4.215 +0.43% -1.95%
Hungarian forint <EURHUF=> 266.7 267.15 +0.17% -1.18%
Croatian kuna <EURHRK=> 7.254 7.254 0% +1.53%
Romanian leu <EURRON=> 4.295 4.296 +0.02% -6.53%
Serbian dinar <EURRSD=> 92.857 93.02 +0.18% -3.64%
All data taken from Reuters at 0936 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)
