CEE MARKETS 3-FX down as grim data weighs, forint at new lows

                                
 (Adds new first 9 paras with new prices, comments on
forint.)
                                
 By Sandor Peto and Dagmara Leszkowicz
                                
 BUDAPEST/WARSAW, Jan 30 (Reuters) - The forint fell to new
all-time lows on Friday as poor economic data weighed on central
Europe's currencies and the Hungarian unit took an additional
hit as investors tried to push the forint through option barrier
levels.
                                
 Currencies in the region have been falling, hammered by
concerns over the global economy and the impacts of the global
crisis on the region's export-driven economies, and Japanese
data published overnight triggered further losses.
                                
 "Recent output data from the Japanese economy, showing
almost 10 percent of contraction in December, caused a huge rise
in risk aversion," said Lukasz Wojtkowiak, FX analyst at
Millennium bank in Warsaw.
                                
 Worst hit was the forint <EURHUF=D2>, losing more than 3
percent on Friday, as the new falls brought it within a whisker
from a key psychological level of 300 against the euro and
option barrier levels built earlier near 300.
                                
 "There is a huge struggle around an option barrier at
298.50," one dealer said.
                                
 By 1118 GMT the forint passed 298.50 and traded at 298.83,
to hit a new record low at 299.10 only minutes later.
                                
 Dealers said 300 remained a target and falls beyond that
were possible. Analysts have said levels weaker than 300 may hit
many households which took out foreign currency loans in the
past years.
                                
 Central banks in the region, including Hungary, have been
cutting interest rates in the past months as dismal economic
date pointed to a drastic slowdown in growth or in the case of
Hungary, an economic contraction of 2-3 percent.
                                
 A combination of recurring waves of risk aversion in global
markets, poor domestic economic figures and the prospects of
further monetary easing have weighed on the currencies of the
region's emerging economies in the first month of the year.
                                
 The Polish zloty <EURPLN=> fell 1.75 percent against the
euro to 4.467 by 1116 GMT, the Czech crown <EURCZK=> lost 1.38
percent to trade at 27.955 and the Romanian leu <EURRON=> shed
1.3 percent to 4.298.
 Romania started talks with the European Commission on a
potential rescue loan to shore up its strained finances, an EU
official said on Thursday, underlining a deepening of financial
woes in eastern Europe. [ID:nLT263681]
                                
 Hungary also launched a $4.5 billion budget reshuffle to
combat the economic crisis and data showed Polish growth slowed
at the end of 2008, with several analysts saying it could now
slip into recession in the first half of 2009.
                                
 In Poland analysts also said concerns over the 2009 budget
are unsupportive for the debt market.
                                
 "There's a concern the government will not be able to
balance this year's budget," said Pawel Bialczynski, dealer at
BRE bank in Warsaw.
                                
 Prime Minister Donald Tusk said on Tuesday the government
saw economic growth in 2009 "in the worst case scenario" at 1.7
percent, but urged the cabinet to look for 17 billion zlotys
savings in order to keep this year budget deficit at 18.2
billion zlotys. [ID:nLR201464]
 ----------------------MARKET SNAPSHOT-------------------------
 Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
 Czech crown      <EURCZK=>  27.955    27.568   -1.38%    -4.3%
 Polish zloty     <EURPLN=>   4.467    4.389   -1.75%    -7.88%
 Hungarian forint <EURHUF=> 298.83    289.65   -3.07%    -11.81%
 Croatian kuna    <EURHRK=>   7.368    7.365   -0.04%    -0.04%
 Romanian leu     <EURRON=>   4.298    4.242   -1.3%    -6.6%
 Serbian dinar    <EURRSD=>  94.518    94.05   -0.5%    -5.33%
                                
 Yield Spreads
 Czech treasury bonds <0#CZBMK=>
 2-yr T-bond   CZ2YT=RR   +5 basis points to  113bps over bmk*
 4-yr T-bond   CZ4YT=RR   +5 basis points to  +110bps over bmk*
 8-yr T-bond   CZ8YT=RR    -2 basis points to  +121bps over bmk*
 Polish treasury bonds <0#PLBMK=>
 2-yr T-bond   PL2YT=RR   +4 basis points to  +321bps over bmk*
 5-yr T-bond   PL5YT=RR    0 basis points to  +257bps over bmk*
 10-yr T-bond PL10YT=RR    -2 basis points to  +244bps over bmk*
 Hungarian treasury bonds <0#HUBMK=>
 3-yr T-bond   HU3YT=RR   +9 basis points to  +834bps over bmk*
 5-yr T-bond   HU5YT=RR   +11 basis points to  +778bps over bmk*
 10-yr T-bond  HU10YT=RR +13 basis points to  +608bps over bmk*
 *Benchmark is German bond equivalent.
 All data taken from Reuters at 1218 CET.
 Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus, Writing by Dagmara
Leszkowicz, Editing by Andy Bruce)