(Recasts with new comments, prices)
By Sandor Peto and Jason Hovet
PRAGUE, Jan 29 (Reuters) - Central European currencies
weakened on Thursday as a rise in U.S. jobless claims added to
an increase in risk aversion in global markets, while the
region's economies continued to feel the impact of the global
crisis.
Hungary's forint <EURHUF=> led the losses, falling 1.37
percent to the euro to 289.8 by 1517 GMT in illiquid trade, also
pushing down government bond prices, while Poland's zloty
reversed Wednesday's gains and eased 0.91 percent to 4.397.
"Equity indices fall, this in turn means currencies in
emerging markets fall and put pressure on (Hungarian) bonds,
that's the story," one Budapest-based fixed income dealer said.
"The U.S. released worse than expected figures in the
afternoon and following that selling pressure started."
A jump in U.S. jobless claiming benefits highlighted global
economic problems and their likely impact on the region where
economies are slowing down, straining state budgets, and central
banks push ahead with looser monetary policy.[]
Hungary launched a $4.5 billion budget reshuffle on Thursday
to combat the economic crisis, which analysts said was a step in
the right direction, but of little help to the economy which is
seen contracting by 2.5-3 percent this year.
The region's largest economy, Poland, grew 4.8 percent last
year, although it is slowing quickly in the global slump.
[]
"The data shows that the last three months of 2008 brought a
sharp slowdown, which supports the case for more interest rate
cuts," said Marta Petka-Zagajewska, economist at Raiffeisen
Bank.
The leu <EURRON=> eased by only 0.07 percent to 4.239 to the
euro after Romania started talks with the European Commission on
a potential rescue loan to shore up its budget. []
Central European stock exchanges traded around 1 percent
lower on Thursday after strong gains earlier in the week.
Data this month has pointed to a deeper than previously
thought slowdown for central Europe's export-reliant economies
as demand collapses in the struggling euro zone.
Poland cut interest rates more than expected to 4.25 percent
on Tuesday as it battles to stay out of recession.
Serbia's central bank held its key rate at 16.5 percent on
Thursday, and despite expectations, offered no liquidity boost
through amended reserve requirement rules. []
The country's government adopted a 1.2 billion euro economic
stimulus package on Thursday, 20 percent more than earlier
planned.[]
The dinar <EURRSD=> trimmed some gains after the central
bank decision, but was still up 0.8 percent. On Wednesday, the
central bank intervened twice to prop up the currency after it
hit an all-time low. []
The Czech crown <EURCZK=> dipped 0.64 percent from
Wednesday's domestic close to 27.6 per euro.
"Sentiment is fragile, and it is impossible to expect a
definitive turnaround to strengthening currencies," said Lubos
Mokras, analyst at Ceska Sporitelna bank.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 27.6 27.422 -0.64% -3.07%
Polish zloty <EURPLN=> 4.397 4.357 -0.91% -6.41%
Hungarian forint <EURHUF=> 289.8 285.84 -1.37% -9.06%
Croatian kuna <EURHRK=> 7.347 7.365 +0.24% +0.24%
Romanian leu <EURRON=> 4.239 4.236 -0.07% -5.3%
Serbian dinar <EURRSD=> 94.089 94.838 +0.8% -4.9%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR +26 basis points to 108bps over bmk*
4-yr T-bond CZ4YT=RR +1 basis points to +108bps over bmk*
8-yr T-bond CZ8YT=RR -9 basis points to +123bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +2 basis points to +315bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +258bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +246bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +8 basis points to +829bps over bmk*
5-yr T-bond HU5YT=RR +11 basis points to +779bps over bmk*
10-yr T-bond HU10YT=RR +14 basis points to +610bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1617 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Sandor Peto/Jason
Hovet; editing by Patrick Graham and Andy Bruce)
