(Refiles to format table correctly)
* Dollar hits 2009 lows, boosting CEE currencies
* Polish economy will grow in 2009 - cbank chief
* Latvian PM rules out devaluation
By Marton Dunai
BUDAPEST, June 3 (Reuters) - The Polish zloty and Hungarian
forint opened stronger on Wednesday as the dollar slid broadly
to hit 2009 lows and comments from central and eastern Europe
boosted sentiment in the region.
The dollar, which was at its weakest this year against a
basket of six currencies <.DXY>, traded at 1.4320 against the
euro before regional markets opened, channelling support to the
zloty and the forint, a dealer in Budapest said.
"That's the main thing moving local markets," he said. "And
that's what we expect for today. If the dollar remains this
weak, the forint and the zloty will probably grow stronger."
The zloty <EURPLN=D2> stayed on the stronger side of the key
4.50 level against the euro on Tuesday, trading at 4.46 at 0714
GMT, and the forint <EURHUF=D2> was just short of breaking
through resistance at 279, trading at 279.80, dealers said.
Other regional currencies were almost flat.
"Yesterday the 4.50 level remained intact and today the
zloty might recover some losses, heading for 4.40," said Lukasz
Wojtkowiak, financial market analyst at Bank Millennium.
"Investors will concentrate on what is going on in equity
markets. We had good U.S. data as well as positive news on GDP
in Australia, which should support emerging markets," he added.
In the U.S., pending home sales grew at the steepest rate in
more than seven years, indicating rising risk appetite, while
trading on Asian markets and Australia indicated that the rally
could continue in eastern Europe as well.
Australia's economy grew in the first quarter, putting it
among the very few developed nations to have avoided a
recession. [] Stock markets in Asia were close to
eight-month highs, taking a breather after steep gains in recent
days. Oil, although slightly down on profit taking, also
remained near 2009 highs.
Dealers also said that there was positive news from the
central and eastern European region. Poland's central bank chief
Slawomir Skrzypek said the country has a chance of economic
growth this year even though other economies in the EU were
contracting. []
In Latvia, Prime Minister Valdis Dombrowskis ruled out a
currency devaluation, which some analysts feared could have
triggered a regional selloff. []
"This noise (of a potential devaluation) will be another
factor placing upward pressure on regional CDS from here,"
analyst Simon Quijano Evans of Cheuvreux said in a morning note.
"Foremost Hungary in our view, with the HUF also the most
vulnerable FX in the region."
"Some were looking for another wave of crisis," a dealer in
Prague said. "But it is not really happening."
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 26.794 26.765 -0.11% -0.15%
Polish zloty <EURPLN=> 4.458 4.49 +0.72% -7.69%
Hungarian forint <EURHUF=> 279.9 281.3 +0.5% -5.84%
Croatian kuna <EURHRK=> 7.332 7.336 +0.05% +0.45%
Romanian leu <EURRON=> 4.18 4.185 +0.12% -3.96%
Serbian dinar <EURRSD=> 93.7 93.916 +0.23% -4.5%
All data taken from Reuters at 0914 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Marton Dunai; editing by David Stamp)
