* Currencies gain ahead of G20
* FX off morning highs as players book profits
* Global mood improves on U.S., UK and Chinese data
* ECB decision with no impact for FX market
(adds fresher quote, changes prices)
By Marius Zaharia and Dagmara Leszkowicz
BUCHAREST/WARSAW, April 2 (Reuters) - Central European
currencies strengthened but gave up some of its morning highs on
Thursday, still led by the Polish zloty and the Hungarian forint
as hopes for further help from the IMF as well as global
macroeconomic data prompted investors to buy more risky assets.
The latest draft of the G20 communique calls for an increase
of International Monetary Fund (IMF) resources by $500 billion,
taking its total available to $750 billion, a sources close to
the issue said on Thursday.[]
"Even though the overall results of the G20 summit are
limited, effects for the EMEA currencies are likely to be
positive," Commerzbank said in a morning note.
Global risk appetite was also boosted by U.S. factory and
home sales data released late on Wednesday, which spurred
optimism that the U.S economy has bottomed out, while house
prices in Britain posted their first rise since 2007.
In addition, the Chinese Federation of Logistics and
Purchasing (CFLP) said the country's official purchasing
managers' index (PMI) rose to 52.4 in March, showing the
economic activity is rebounding. []
By 1354 GMT, the Polish zloty <EURPLN=> and the Hungarian
forint <EURHUF=> were leading regional gains, adding around 1.4
and 1.5 percent, respectively, from Wednesday's domestic close.
The Czech crown <EURCZK=> firmed some 1.0 percent and the
Romanian leu gained 0.1 percent.
Stocks in the region also continued to climb, with Prague's
PX <> and Warsaw WIG20 <> gaining more than 4 percent
and dealers said rally on stocks gave the currencies an extra
fuel.
"We have lots of positive information today -- this
potential funds increase by the IMF as well as the data from
China are a very good signals for the global economy," said
Lukasz Wojtkowiak, FX analyst at Millennium bank in Warsaw.
He also said the European Central Bank's (ECB) decision to
cut interest rates by a quarter of percentage point did not
affect currencies in the region.
On the domestic side the Polish Prime Minister Donald Tusk
said there is a possibility Poland may not meet its target of
joining the pre-euro European Exchange Rate mechanism (ERM-2) in
the first half of 2009.[].
Earlier in the day deputy finance minister Ludwik Kotecki
said Poland will prepare a document by the end of April setting
out conditions that will allow the government to set a date for
entering the ERM-2.[]
While regional assets were rising, credit rating agency
Moody's issued ratings downgrades on two of Austria's biggest
banks exposed to emerging Europe on Wednesday, following up on a
warning that rattled emerging European markets in February.
Moreover, the Czech Republic and Hungary have been hit by a
fall of governments and Budapest suffered downgrades by S&P and
Moody's this week, adding weakening pressure on regional assets.
"We'll see how long global hopes will offset the negative
outlook in the region," one currency dealer in Bucharest said.
Bonds strengthened slightly across the region helped by
improved sentiment, but dealers were still worried over supply
concerns with upcoming auctions.
"Czech bonds look cheap, but forthcoming issuance makes us
stand by our call for widening ASW spreads to continue,"
Komercni Banka traders said in a note.
On Wednesday, the Czech Republic sold more than it offered
at an auction of 15-year bonds [], but rising yields
were less positive and Hungary continued to buy back its bonds
to help its market which remains almost frozen [].
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.908 27.165 +0.96% -0.58%
Polish zloty <EURPLN=> 4.501 4.563 +1.38% -8.58%
Hungarian forint <EURHUF=> 299.4 303.9 +1.5% -11.97%
Croatian kuna <EURHRK=> 7.45 7.455 +0.07% -1.14%
Romanian leu <EURRON=> 4.219 4.224 +0.12% -4.85%
Serbian dinar <EURRSD=> 94.15 94.682 +0.57% -4.96%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +32 basis points to 236bps over bmk*
4-yr T-bond CZ4YT=RR -25 basis points to +259bps over bmk*
8-yr T-bond CZ8YT=RR -3 basis points to +333bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -7 basis points to +426bps over bmk*
5-yr T-bond PL5YT=RR -7 basis points to +373bps over bmk*
10-yr T-bond PL10YT=RR -5 basis points to +321bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -22 basis points to +1039bps over
bmk*
5-yr T-bond HU5YT=RR -22 basis points to +971bps over bmk*
10-yr T-bond HU10YT=RR -22 basis points to +854bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1354 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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emerging market news []
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(Reporting by Reuters bureaus, Writing by Marius Zaharia and
Dagmara Leszkowicz, Editing by Victoria Main)
