(Adds details, fixed income)
PRAGUE, Sept 29 (Reuters) - Hungary's forint fell ahead of a
central bank policy decision on Monday, leading losses for
central European currencies as the financial crisis spread and
investors looked to a U.S. vote on the credit rescue plan.
The forint <EURHUF=> fell 0.7 percent to 241.5 against the
euro by 0752 GMT, while the Czech crown <EURCZK=> shed 0.5
percent to 24.46 per euro and the Polish zloty <EURPLN=> lost
0.8 percent to 3.381 per euro from Friday's domestic close.
Global nerves in the year-old credit crunch have hurt risk
appetite and flows of capital into emerging markets like
ex-communist central Europe. The crisis widened again on Monday,
with Belgian-Dutch group Fortis being partly nationalised.
"I think the prevailing uncertainty will likely retain an
easing bias in the forint. At least early losses today point in
that direction," a Budapest-based currency dealer said.
Hungary's central bank meets on Monday as a round of central
bank meetings in the region draws to a close, and is expected to
follow its Czech, Polish and Romanian counterparts by leaving
borrowing costs unchanged.
Surging price growth in the past year had forced most of the
banks to tighten interest rates sharply, although price pressure
looks to have eased in recent months as a euro zone slowdown hit
demand, prompting the Czechs to even cut rates.
Dealers said they would look to Hungary's central bank
statement on Monday for signals of whether it is ready to turn
turn the corner more policy as well.
Hungarian government bonds were little changed ahead of the
decision, while in Poland bonds weakened slightly.
"We've opened slightly weaker although it's quite quiet on
the market," said Maciej Slomka, chief dealer at Pekao in
Warsaw. "Despite that the market is still concerned about
stability."
Markets will watch events in the U.S. closely, where
lawmakers were set to vote on a $700 billion rescue plan to
clear up bad debt from jammed credit markets.
"Word is that the (U.S.) rescue package will be passed.
However, neither regional, nor broader emerging markets seem to
be overly enthusiastic about that for the time being," the
Budapest currency trader said.
In other trade, Romania's leu <EURRON=> lost 0.4 percent to
3.696 versus the euro. In Croatia, the kuna <EURHRK=> slipped to
7.106 per euro from 7.105, and the Serb dinar was little changed
at 76.49 per euro.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.46 24.343 -0.48% +7.69%
Polish zloty <EURPLN=> 3.381 3.354 -0.81% +6.10%
Hungarian forint <EURHUF=> 241.500 239.850 -0.69% +4.49%
Croatian kuna <EURHRK=> 7.106 7.105 -0.01% +3.01%
Romanian leu <EURRON=> 3.696 3.682 -0.38% -3.23%
Serbian dinar <EURRSD=> 76.49 76.558 +0.09% +2.88%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +31 basis points to 36bps over bmk*
5-yr T-bond CZ5YT=RR +29 basis points to +30bps over bmk*
10-yr T-bond CZ9YT=RR +17 basis points to +42bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +38 basis points to +284bps over bmk*
5-yr T-bond PL5YT=RR +28 basis points to +230bps over bmk*
10-yr T-bond PL10YT=RR +16 basis points to +179bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +33 basis points to +582bps over bmk*
5-yr T-bond HU5YT=RR +29 basis points to +531bps over bmk*
10-yr T-bond HU10YT=RR +17 basis points to +389bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0952 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet; editing
by Patrick Graham)
