(Adds details, fixed income)
PRAGUE, Sept 10 (Reuters) - Emerging European currencies
edged lower against the euro in morning trade on Wednesday, with
the Czech crown resisting falls after the statistics office
revised up second quarter growth numbers.
The region was led lower by the Hungarian forint and Polish
zloty as they came off a technical bounce on Tuesday. The forint
<EURHUF=> dropped 0.7 percent to 240.6 per euro by 0809 GMT,
while the zloty <EURPLN=> fell 0.3 percent to 3.466 to the euro.
Currencies broke through key technical levels on Tuesday,
but have generally fallen off July highs as the region's growth
outlook dims due to a slowdown in the euro zone, its main trade
partner.
Growth concerns have also led the dollar's renewed strength
against the euro, the region's main reference currency, which
has harmed the emerging currencies as investors switch into
dollar assets.
In the Czech Republic, the crown <EURCZK=> traded almost
unchanged at 24.82 per euro compared to 24.798 late on Tuesday,
after the stats office revised up second quarter economic growth
to 4.6 percent.
Analysts, however, said the data still clearly showed a
slowdown and pointed to chances of an interest rate cut by the
end of the year after the Czech central bank became the first in
the region to loosen policy in August.
"The slowing economy plays into another cut in interest
rates," said Helena Horska, an analyst with Raiffeisenbank. "By
the end of the year we expect one more cut to 3.25 percent."
Romania's leu <EURRON=> lost 0.3 percent to 3.59 per euro,
unaffected by data today showing inflation slowed more than
expected to 8 percent in August.
The drop in price growth came after a July peak of 9
percent, raising expectations the central bank will halt its
tightening cycle.
Croatia's kuna <EURHRK=> edged up to 7.12 against the euro
from 7.13 and Serbia's dinar <EURRSD=> added 0.1 percent to
76.36 to the euro.
In Poland, bonds strengthened across the curve, following
gains on German bunds and ahead of a key auction today.
"It seems optimism came back on the market," said a bond
dealer at one Warsaw-based bank. The finance ministry will offer
1.0 billion zlotys in bonds maturing in 2029 on Wednesday.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.825 24.798 -0.11% +6.31%
Polish zloty <EURPLN=> 3.466 3.457 -0.26% +3.74%
Hungarian forint <EURHUF=> 240.570 239.000 -0.66% +4.86%
Croatian kuna <EURHRK=> 7.128 7.133 +0.07% +2.71%
Romanian leu <EURRON=> 3.590 3.579 -0.31% -0.27%
Serbian dinar <EURRSD=> 76.360 76.430 +0.09% +3.05%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -12 basis points to 7bps over bmk*
5-yr T-bond CZ5YT=RR -6 basis points to +26bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +44bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +232bps over bmk*
5-yr T-bond PL5YT=RR -6 basis points to +219bps over bmk*
10-yr T-bond PL10YT=RR -7 basis points to +193bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +522bps over bmk*
5-yr T-bond HU5YT=RR +3 basis points to +474bps over bmk*
10-yr T-bond HU10YT=RR -3 basis points to +394bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1009 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
Patrick Graham)
