* FX hold firmer, zloty falls into range
* Romania tenders 364-day paper, yield may fall
* Markets mostly shrug off China rate rise
PRAGUE, Dec 27 (Reuters) - Eastern European currencies held
steady at the start of the final trading week of the year and
dealers said trading would likely stay muted as investors
held onto profits.
The zloty inched up, mostly ignoring comments from Polish
Finance Minister Jacek Rostowski in a local newspaper interview
saying the country could join the euro zone's testing ground,
the ERM2 mechanism, in 2013. []
The currency has held on the strong side of the 4.00 per
euro level over the past two weeks. Two markets sources told
Reuters last week that Poland's state-owned BGK bank was
buying zlotys last week in exchange for euros.
The finance ministry is widely expected to try to keep the
zloty firm before a Dec. 31 fixing to avoid breaching debt
levels that, if passed, would trigger spending cuts. Almost a
quarter of Polish debt is in foreign currencies. []
The zloty is up 1.3 percent this month. Sharp moves in the
low liquid markets in central Europe was still a risk, dealers
and analysts said.
"There might be some coincidental changes without any
short-term trends," Bank BPH said in a morning comment.
"If we have no further interventions on the part of BGK,
the
zloty will trade inside 3.95-3.98 versus euro with limited
market activity (since the London market is closed)."
On Monday, the zloty dipped to 3.968 to the euro,
less than 0.1 percent from Friday, when much of central Europe
was on a market holiday.
Hungary's forint added 0.25 percent. The Czech
crown inched up to 25.27 per euro, while the Romanian
leu dipped 0.05 percent by 0826 GMT.
Stock markets mostly shrugged off a Chinese interest rate
hike over the weekend -- a move that usually hits
appetite for emerging market risk assets. []
Stocks have rallied to the end of 2010 thanks to an
improving outlook in the global economy.
ROMANIA TENDER
In Romania, markets were waiting for a tender of 364-day
treasury bills. Some traders expect a steepening of the curve,
with six-month and one-year maturities looking attractive,
while
yields for longer-dated paper are expected to rise as Romania
tries to extend the duration of its debt.
"The average yield (at Monday's tender) may fall at 6.9
percent (from 7.0 percent at the last tender)," a trader said.
"I think next year they will have to pay higher yields to
get money from abroad due to high rollover needs and as locals
are already close to reaching their limits (of investing in
Romanian government debt)."
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown 25.271 25.283 +0.05% +4.14%
Polish zloty 3.968 3.965 -0.08% +3.43%
Hungarian forint 278.2 278.9 +0.25% -2.82%
Croatian kuna 7.385 7.385 0% -1.03%
Romanian leu 4.288 4.286 -0.05% -1.18%
Serbian dinar 106.07 104.9 -1.1% -9.61%
All data taken from Reuters at 0928 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)
