CEE MARKETS 3-FX rebound in pre-holiday trading

                                
 (adds quotes, details, updates prices)
                                
 By Marius Zaharia
                                
 BUCHAREST, Dec 19 (Reuters) - Central European currencies
rebounded on Friday, led by Polish zloty gains in thin trading
as many investors closed long-euro positions ahead of the
holiday season.
                                
 The zloty swung in volatile trade and earlier neared a 2-1/2
year low hit on Thursday, after weeks of weakening triggered by
worries over companies that hedged the wrong way in the summer
when the unit was at all-time highs.
 At 1150 GMT, the unit <EURPLN=> was 1.3 percent up from
Thursday's domestic close at 4.07 per euro, but was still down
7.3 percent on the month, a fall which has dragged on many of
the region's currencies.
                                
 In Czech Republic, the crown <EURCZK=> was 0.6 percent
firmer at 26.32 per euro, while in Hungary, the forint <EURHUF=>
was up 0.77 percent at 264.1 per euro, also in quiet trend.
                                
 "There is a reversal in all the currencies in the world, and
it's happening in emerging Europe as well," a London dealer
said. "Liquidity is thin, so the moves look spectacular, but
this is not a new trend."
                                
 "It's been a tough week for the region and now investors are
closing long-euro positions ahead of the weekend at least, if
not ahead of the holidays."
                                
 On Friday, the Polish central bank governor that zloty falls
were not justified by fundamentals [ID:WAR007721]. Dealers said
the comments did not influence zloty trading.
                                
 Mounting expectations for a new wave of rate cuts have been
weighing on regional currencies in recent weeks, as recession is
showing its teeth to the east, after biting the euro zone.
                                
 The Czechs cut interest rates 50 basis points this week,
while banks in Hungary and Poland will likely reduce borrowing
costs next week.
                                
 In Romania, the leu <EURRON=> traded 0.6 percent firmer as
well. The market was neutral on the in-waiting prime minister
Emil Boc's proposal for the country's next finance minister,
Gheorghe Pogea, a relatively unknown figure.
                                
 Pogea told Reuters the final version of the governing
programme which is expected to be released later in the day sees
the 2009 budget deficit at 1.7 percent of GDP from 2.5 percent
in a draft posted earlier this week [ID:nLJ704634].
                                
 The parliament is expected to endorse the new cabinet on
Monday.
                                
 Debt markets remained quiet, succumbing to a holiday lull,
and waiting for rate moves in Hungary and Poland next week.
                                
 "It is very quiet - I haven't seen any trades," said Olgierd
Zieblinski, fixed-income dealer at Rabobank in Warsaw. "I think
the rate cut by 50 basis points in December has already been
priced in."
----------------------MARKET SNAPSHOT ** ----------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2008 
Czech crown      <EURCZK=>   26.32   26.47   +0.57%   +0.67%
Polish zloty     <EURPLN=>    4.07    4.124  +1.31%  -13.04%
Hungarian forint <EURHUF=>  264.1   266.15   +0.77%   -4.45%
Croatian kuna    <EURHRK=>    7.239   7.237  -0.03%   +1.19%
Romanian leu     <EURRON=>    3.932   3.955  +0.58%   -9.83%
Serbian dinar    <EURRSD=>   85.76   85.981  +0.26%   -8.89%

** Replaces snapshot with closing prices from 1600 GMT.

Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond   CZ3YT=RR    -8 basis points to  152bps over bmk*
5-yr T-bond   CZ5YT=RR    0 basis points to  +147bps over bmk*
10-yr T-bond   CZ9YT=RR   +3 basis points to  +119bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR   +2 basis points to  +360bps over bmk*
5-yr T-bond   PL5YT=RR   +1 basis points to  +306bps over bmk*
10-yr T-bond PL10YT=RR    -1 basis points to  +256bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +46 basis points to  +802bps over bmk*
5-yr T-bond   HU5YT=RR   +31 basis points to  +737bps over bmk*
10-yr T-bond   HU10YT=RR +49 basis points to  +572bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1350 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news [EMRG] 
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 [CEN]  Economic Data Guide <ECONGUIDE>
Official rates [GLOBAL/INT]  Emerging Diary [EMRG/DIARY]  
Top events [M/DIARY]  Diaries [DIARY] Diaries Index [IND/DIARY] 
                                
 (Reporting by Reuters bureaus, Writing by Marius Zaharia;
Editing by Victoria Main)