* Forint hits record low against euro
* Crown, zloty give up morning gains as stocks dip
* Romanian leu only unit to resists falls
(Recasts with currency falls.)
By Dagmara Leszkowicz and Sandor Peto
BUDAPEST/WARSAW, March 5 (Reuters) - Hungary's forint hit a
record low to the euro and the Czech crown and Poland's zloty
gave up early gains as falling stock prices and a firming of the
dollar to the euro signalled an increased aversion to risk.
Romania's leu, where dealers have reported indirect
intervention by the central bank this week, was the only
currency to buck the trend as the forint<EURHUF=> hit a new
record low of 312.50 against the euro,
The Hungarian currency rebounded to 311.61 by 1231 GMT but
was still weaker by one percent from Wednesday.
"The whole region (Central European currencies) is falling
due to risk aversion, because of the falls by stock markets,"
one dealer said.
"For a couple of days people (have) differentiated between
currencies, but that cannot last for a long time, the whole
region will be lumped together again," the dealer added.
Gains for the crown and zloty in recent days had offered a
sign that investors were singling out the currencies of
countries with weaker fundamentals like Hungary for punishment,
but on Thursday markets were moving as one again.
The Czech crown <EURCZK=> was 1.1 percent weaker against the
euro to bid at 27.679, while the Polish zloty <EURPLN=> weakened
0.7 percent. Both currencies firmed on Wednesday and early on
Thursday.
Romania' leu<EURRON=> was flat at 4.28.
CROWN DEAL OVER
The Czech crown firmed earlier this week, lifted also by
speculation that French drugs maker Sanofi-Aventis <SASY.PA> was
buying crowns to pay for its 70 percent buyout of shares in
Czech generics drug maker Zentiva <>, which it
succeeded in last month.
"It's a bit crazy... and volatility is high right now," a
Prague-based dealer said. "It could be this (Zentiva) order has
finished... but nobody knows."
Stock indices in Europe were falling.
Dealers and analysts said earlier this week that investors
had started taking long positions in the zloty or crown against
the Hungarian forint due to better prospects for managing the
global slowdown.
Analysts have said falling interest rates to combat sinking
economies in central Europe has accelerated the fall of
currencies to multi-year or record lows this year.
But Czech rate setters signalled last month that easing was
off the cards due to the weak crown, something other central
banks have avoided so far.
Policymakers have also been on a push to differentiate their
economies from weaker neighbours in central Europe.
The Polish central bank governor, Slawomir Skrzypek, told
Polish daily Fakt that the country did not need IMF aid --
unlike Hungary which sought help last October -- due to its
stable fundamentals. []
Romania has also started talks with the IMF on a possible
deal.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.679 27.37 -1.12% -3.35%
Polish zloty <EURPLN=> 4.718 4.686 -0.68% -12.78%
Hungarian forint <EURHUF=> 311.61 308.37 -1.04% -15.42%
Croatian kuna <EURHRK=> 7.406 7.393 -0.18% -0.55%
Romanian leu <EURRON=> 4.28 4.281 +0.02% -6.21%
Serbian dinar <EURRSD=> 94.51 94.28 -0.24% -5.32%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -18 basis points to 216bps over bmk*
4-yr T-bond CZ4YT=RR -21 basis points to +240bps over bmk*
8-yr T-bond CZ8YT=RR -12 basis points to +313bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +457bps over bmk*
5-yr T-bond PL5YT=RR +6 basis points to +391bps over bmk*
10-yr T-bond PL10YT=RR +8 basis points to +325bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -19 basis points to +1170bps over
bmk*
5-yr T-bond HU5YT=RR -52 basis points to +1027bps over
bmk*
10-yr T-bond HU10YT=RR -38 basis points to +831bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1331 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus; Writing by Dagmara Leszkowicz;
Editing by Patrick Graham)
