BUDAPEST, Jan 25 (Reuters) - Emerging European currencies
opened Tuesday trading stronger, backed mainly by the euro's
gains, with investors quickly putting behind them recent
interest rate hikes in Hungary and Poland.
"Peripheral spreads continue to tighten, the euro is
stronger versus the dollar, so people are putting risk on their
books," a Bucharest-based dealer said.
The Polish zloty <EURPLN=> added 0.3 percent by 0806 GMT, as
did the Hungarian forint <EURHUF=>, with the Czech crown
<EURCZK=> up 0.2 percent and the Romanian leu <EURRON=> 0.1
percent higher.
Hungary's central bank raised interest rates for the third
time in as many months to 6 percent <NBHI>, and most analysts
said the bank was now likely to leave the rate on hold.
"With 75 bp in hikes now behind them, further rate hikes
from here are not a done deal but instead depend on data flow
and risk appetite. If not the end of the hiking cycle, Monday's
move brought us close," UniCredit said in a note to clients.
"Should PM Orban's reform package contain some credible
elements in February, another hike will be more difficult to
push through. The issue of a Eurobond would (also) reduce the
case for a hike."
Hungary's debt management agency AKK has said it will
front-load its debt sales this year, if market appetite allows.
Hungary plans to issue foreign-currency bonds worth a total
of 4 billion euros this year, to finance expiring debt and the
repayment of a loan to the European Union.
The International Monetary Fund has started a mission to
review Romania's 20 billion euro aid package with eyes on a new
precautionary deal. []
Markets widely expect Romania to secure the last tranches of
its rescue package and now await details of the new deal, which
would help support the leu currency and lower borrowing costs.
Investors remained focused on core markets and most were
bullish on the euro, pushing it to a new two-month high, ahead
of the Fed's rate decision on Wednesday. The Fed was seen
holding fire longer than the European Central Bank.
[]
That should keep emerging European currencies in a clear
range as well, with the zloty between 3.85-3.90 to the euro, and
the forint in the 273-276 range, dealers said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.142 24.198 +0.23% +3.55%
Polish zloty <EURPLN=> 3.865 3.876 +0.28% +2.41%
Hungarian forint <EURHUF=> 273.85 274.6 +0.27% +1.51%
Croatian kuna <EURHRK=> 7.397 7.396 -0.01% -0.23%
Romanian leu <EURRON=> 4.261 4.265 +0.09% -0.66%
Serbian dinar <EURRSD=> 104.3 104.5 +0.19% +1.56%
All data taken from Reuters at 0906 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaux, writing by Marton Dunai; Editing
by Catherine Evans)
