(Adds Serbia's dinar, updates prices)
By Dagmara Leszkowicz and Sandor Peto
WARSAW/BUDAPEST, Dec 9 (Reuters) - The Romanian leu fell to
a one-month low on Tuesday due to uncertainty over the country's
next governing coalition, while Poland's zloty weakened below
its key level of 3.90 to the euro.
Serbia's dinar extended the strong gains posted since last
Thursday when the central bank announced measures to boost euro
liquidity, while Hungary's forint eased a shade one day after a
surprise official interest rate cut.
In Romania coalition talks are continuing, with the leftist
Social Democrats and centrist Democrat-Liberals moving closer to
forming a government, a prospect greeted with some trepidation
by the market. []
At 1132 GMT, the Romanian currency <EURRON=> was down 0.67
percent against the euro, trading at 3.895.
"The leu is falling on commercial orders, not to mention the
fact that the Social Democrats are not seen positively by the
markets," one dealer said.
Other emerging European currencies were moving around their
closing levels, with the Czech crown <EURCZK=> slightly above
its previous close and the forint <EURHUF=> easing slightly.
"For the time being, the forint seems to have taken the
surprise interest rate cut favourably and the external
environment is also supportive," a Budapest-based currency
dealer said.
"The Dow is at a two-week high, so sentiment is better,
although players seem to have started out a bit more carefully
this morning."
The forint<EURHUF=> traded at 263.68 to the euro at 1132
GMT, weaker by 0.13 percent, one day after the central bank cut
rates by 50 basis points to 10.5 percent at an extraordinary
meeting to help the economy which is seen sliding into
recession.
In Serbia the dinar<EURRSD=> continued to firm in thin trade
to 83.554 against the euro and the central bank was expected to
offer to buy euros at a trading session with commercial banks
later in the day.
Despite improving sentiment on global and local markets, the
Polish zloty <EURPLN=> weakened beyond the key technical level
of 3.90 against the euro, and analysts said the currency is
definitely on a depreciating trend.
"The zloty is weakening and it will probably go to 4.00 to
the euro," said Ernest Pytlarczyk, head of financial markets
research at BRE bank in Warsaw.
"Since there are no signs that the American economy is
recovering, the currency has no support for gains."
The declines in the Polish currency come despite
expectations of relatively robust economic growth in 2009.
Polish central bank governor Slawomir Skrzypek said on
Tuesday GDP growth may come in above 3 percent, higher than
previously thought [] and well ahead of most other
European economies.
Some analysts say the currency is suffering from fears that
some local exporters will now scramble to buy euros to settle
losses on hedging contracts taken to protect their earnings when
the currency was surging earlier in the year.
"The market is waiting for the financial watchdog report due
around mid-December that is likely to show the scale of the
problem and it seems the zloty is weakening on this issue," said
Jan Koprowski, dealer at BNP Paribas in Warsaw.
On Monday rating agency Moody's downgraded its outlook for
the Czech Republic to stable from positive [] but
analysts said it had had a limited impact on the currency.
"It is funny. For this reason and many others, the crown
should be under pressure, (weaker than) 26.00 (versus the euro)
but it is not," a Prague-based dealer said.
He said the unit was driven by positive sentiment on global
markets as risk aversion eases and investors return to equities.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.718 25.74 +0.09% +2.94%
Polish zloty <EURPLN=> 3.923 3.908 -0.38% -8.96%
Hungarian forint <EURHUF=> 263.68 263.35 -0.13% -4.28%
Croatian kuna <EURHRK=> 7.185 7.19 +0.07% +1.93%
Romanian leu <EURRON=> 3.895 3.869 -0.67% -8.79%
Serbian dinar <EURRSD=> 83.554 84.034 +0.57% -6.09%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +7 basis points to 152bps over bmk*
5-yr T-bond CZ5YT=RR +2 basis points to +143bps over bmk*
10-yr T-bond CZ9YT=RR -4 basis points to +110bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -52 basis points to +730bps over bmk*
5-yr T-bond HU5YT=RR -65 basis points to +682bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +523bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1232 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
For related news and prices, click on the codes in brackets:
All emerging market news []
Spot FX rates Eastern Europe spot FX <EEFX=>
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz/Sandor Peto; Editing by Ruth Pitchford)
