* Emerging currencies firm vs euro on positive global mood
* Investors eye rate-setting meetings in Romania, Poland
* Hungarian cbank cuts 2012 GDP fcast to 3 pct
(Adds bonds, updates prices)
By Luiza Ilie
BUCHAREST, March 30 (Reuters) - Emerging European currencies
firmed against the euro on Wednesday as global risk appetite
improved and stocks rose, with investors eyeing upcoming
interest rate decisions in Romania and Poland.
Stock markets gained strongly across the region, led by
Budapest <> which was up 0.9 percent on the day.
"Risk appetite looks better after the yen weakened, and
stocks are rising at the end of the month and quarter," one
Bucharest trader said.
By 0935 GMT, the Romanian leu <EURRON=> had firmed 0.6
percent to 4.0970 per euro, as foreign investors snapped up the
unit after two previous sessions of profit taking pushed it away
from recent one-year highs.
Romania's central bank is widely expected to keep interest
rates unchanged at 6.25 percent at its meeting on Thursday.
Persistently high inflation has led economists to revise
earlier expectations of rate cuts later this year, and most now
expect the central bank to keep rates frozen in 2011.
In Poland, the zloty was up 0.1 percent against the euro
<EURPLN=>, supported by expectations of a quarter point hike in
interest rates next week from 3.75 percent, as well as expected
inflows from planned government asset sales. []
A multi-year budget plan showed the Polish government
targets increasingly smaller fiscal deficits by 2014, while the
proportion of public debt to gross domestic product was seen
well below its legal 55 percent threshold. []
HUNGARIAN FORECASTS
The Hungarian forint <EURHUF=> firmed 0.3 percent on the
day, recovering from a five-day low against the euro in the
previous session seen as a corrective move after the central
bank held rates earlier in the week.
Hungarian bond were mixed in slow trade although a firmer
forint could push yields lower, a fixed income trader said.
The central bank said it has cut its forecast for economic
growth in 2012 to 3 percent, citing weak lending and investment
and the impact of planned steps to reduce the budget deficit.
[]
The bank said in its quarterly inflation report, drawn up
with a new methodology, that its medium-term 3 percent inflation
target could be reached in the second half of next year if
interest rates remained unchanged for a long period.
Central bank economist Barnabas Virag declined to disclose
the forint exchange rate forecasts used for the report.
"If domestic interest rates stay at the current level, while
there will be hikes in the external environment (abroad), you
can draw conclusions from that for the exchange rate," he said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.452 24.534 +0.34% +2.24%
Polish zloty <EURPLN=> 3.989 3.994 +0.13% -0.78%
Hungarian forint <EURHUF=> 267.1 267.82 +0.27% +4.07%
Croatian kuna <EURHRK=> 7.377 7.382 +0.07% +0.04%
Romanian leu <EURRON=> 4.097 4.12 +0.56% +3.32%
Serbian dinar <EURRSD=> 103.35 103.49 +0.14% +2.49%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -3 basis points to -1bps over bmk*
7-yr T-bond CZ7YT=RR 0 basis points to +60bps over bmk*
10-yr T-bond CZ9YT=RR +2 basis points to +64bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -4 basis points to +463bps over bmk*
5-yr T-bond HU5YT=RR +1 basis points to +434bps over bmk*
10-yr T-bond HU10YT=RR 0 basis points to +388bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1215 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus; Writing by Luiza Ilie; Editing
by Catherine Evans)
