(Adds details, fixed income)
PRAGUE, Aug 29 (Reuters) - Emerging European currencies fell
in Friday trade due to concern about the outlook for regional
growth, with the Czech crown hitting a three-month low against
the euro after comments from the central bank's chief.
The crown <EURCZK=> fell 0.3 percent to 24.705 against the
single currency by 0746 GMT, while the Polish zloty <EURPLN=>
neared 3.36 against the euro, from Thursday's close of 3.348.
Czech bank head Zdenek Tuma said on Friday the chances of
strong wage demands being met were low since company profits
were being squeezed [].
"Although inflation expectations have moderately risen,
there is a clear belief that inflation will fall, and that also
confirms inflation expectations are well anchored," he said in
an interview in daily Hospodarske Noviny.
"The situation is not rosy for companies."
The comments added to concern about the economy, dealers
said.
"The main point is the Czech economy will be slowing," CSOB
trader David Sykora said. "There is the possibility of another
rate cut."
The Czech central bank was the first in the region to cut
interest rates on Aug. 7, while Hungary's and Poland's banks
held rates steady this month.
Higher rates had added to firming in central and eastern
European currencies, which hit record highs in July. Currencies
have since reversed, undermined by concerns over the
Russian-Georgian conflict in the east and a euro zone slowdown
to the west.
In other trading, the Hungarian forint <EURHUF=> edged 0.1
percent lower to 238.85 against the euro, nearing the important
240 level.
"The 240 (per euro) level is an important technical barrier,
which may limit losses, however, given that it's a Friday such
levels are generally easier to breach," one trader said.
Romania's leu <EURRON=> fell slightly to 3.538, while
Serbia's dinar pushed 0.35 percent higher to 76.2 per euro.
Croatia's kuna was slightly higher at 7.15, supported by
demand ahead of an expected bid in oil group INA by Hungary's
MOL, dealers said.
Government bonds were also stable, with Poland's market
eyeing gross domestic product data. Data showed the economy grew
by a faster than expected 5.8 percent year-on-year in the second
quarter.
*************************MARKET SNAPSHOT************************
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.705 24.675 -0.12% +6.76%
Polish zloty <EURPLN=> 3.356 3.348 -0.24% +6.79%
Hungarian forint <EURHUF=> 238.850 238.650 -0.08% +5.54%
Croatian kuna <EURHRK=> 7.150 7.155 +0.07% +2.41%
Romanian leu <EURRON=> 3.538 3.537 -0.03% +1.18%
Serbian dinar <EURRSD=> 76.200 76.470 +0.35% +3.25%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR 0 basis points to -4bps over bmk*
5-yr T-bond CZ5YT=RR +1 basis points to +5bps over bmk*
10-yr T-bond CZ10YT=RR 0 basis points to +37bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR 0 basis points to +218bps over bmk*
5-yr T-bond PL5YT=RR +0 basis points to +209bps over bmk*
10-yr T-bond PL10YT=RR +3 basis points to +192bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +4 basis points to +479bps over bmk*
5-yr T-bond HU5YT=RR +4 basis points to +451bps over bmk*
10-yr T-bond HU10YT=RR +5 basis points to +376bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 0946 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Swaha Pattanaik and Patrick Graham)
