* CEE currencies ease after Romanian ruling
* Forint worst hit
BUDAPEST, June 25 (Reuters) - Romania's leu weakened on
Friday, dragging along Central European currencies, after the
Romanian Constitutional Court rejected parts of a key austerity
package there according to a local news agency report.
[]
Worst hit was Hungary's forint <EURHUF=>, which fell 0.8
percent against the euro to 286.09 from Thursday by 0847 GMT.
Both Hungary and Romania are carrying out budget adjustments
to meet agreements with international lenders.
The leu <EURRON=> lost 0.6 percent to bid at 4.26 against
the euro. Poland's zloty <EURPLN=> fell 0.5 percent and the
Czech crown shed 0.3 percent.
The disbursement of about 2 billion euros in International
Monetary Fund and European Union aid depends on the court's
decision.
The court is expected to publish shortly its decision which
can further increase financing risks for Romania, which is
already struggling to sell debt and likely send the leu lower.
[]
"The zloty is also weakening ... it may be the Romanian
ruling," one Budapest-based currency dealer said, adding that
with the forint breaking through the 285 technical level against
the euro it may now weaken to 287.50-288.00.
Another dealer said the European debt crisis was keeping
market sentiment fragile anyway.
"Some investors may need to close positions in Greece, and
some of the same hedge funds may also work here and withdraw
money," he said.
Central European assets fell on Thursday as the euro and
peripheral euro zone borrowers remained under pressure,
increasing risk aversion in the world, while concerns over
budgets weighed on Hungarian and Romanian debt auctions.
Hungary cut the value of its 12-month Treasury bill auction
on Thursday due to low demand, and yields at the sale rose.
[]
The forint got an additional hit from the Swiss franc's side
<CHFHUF=>, reaching 15-month lows at 209.50 and triggering
concerns over the sizeable amount of Swiss franc loans held by
Hungarian households.
Unicredit said in a daily note on Friday that while the weak
bill auction in Hungary was negative news but not a particular
reason for concern, the Swiss franc's firming was a factor to
watch closely.
"(The bill auction was) not dramatic but the second time in
a row this has sent a clear negative reaction to investors,"
Unicredit said.
"However, we are not overly worried about the potential
demand for t-bills as the banking sector is still over-liquid.
On the other hand we are particularly worried about the current
CHF/HUF level which hit a year-to-date high yesterday and was
only 2 percent below last year's all-time highs," the bank said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.857 25.79 -0.26% +1.78%
Polish zloty <EURPLN=> 4.139 4.117 -0.53% -0.85%
Hungarian forint <EURHUF=> 286.09 283.79 -0.8% -5.5%
Croatian kuna <EURHRK=> 7.193 7.195 +0.03% +1.62%
Romanian leu <EURRON=> 4.26 4.235 -0.59% -0.53%
Serbian dinar <EURRSD=> 103.71 103.42 -0.28% -7.55%
All data taken from Reuters at 1047 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Krisztina Than; editing by Stephen Nisbet)
