(Changes dateline, new throughout)
BUDAPEST, Oct 1 (Reuters) - Central Europe's most liquid
high-yielding currencies, the Polish zloty and Hungary's forint
retreated on Wednesday as a surge by the yen, a key funding
currency, indicated that risk aversion increased again.
Romania's leu gave up most of its early gains while other
currencies in the region, including the Czech crown, changed
little, as investors were watching the U.S. Senate which will
later vote on a bailout plan to the financial sector.
The region's markets will remain nervous about the global
financial crisis and its impacts on global liquidity and
appetite for emerging market assets, dealers said.
The Polish, Czech and Hungarian purchasing manager indices
for September published on Wednesday fell, indicating further
economic slowdown, but investors shrugged off the data as the
global jitters discouraged the opening of any new positions.
"(Market players) are trying to get rid of open positions
like hot potatoes," one Budapest-based foreign currency dealer
said. "There is no trend, we go up and down as news (from
abroad) changes and the dollar <EUR=> changes."
The forint <EURHUF=> shed 0.55 percent against the euro to
trade at 242.85 at 1432 GMT and Hungarian government bonds also
retreated as the currency weakened, while the zloty <EURPLN=>
eased 0.24 percent to 3.394.
"The forint is still a carry currency and when the yen moves
so much, it certainly has an impact," one dealer said.
The Czech crown <EURCZK=>, which has a much lower yield than
the Hungarian and Polish units, showed little change in quiet
trade.
Investors stick to the sidelines until U.S. lawmakers push
through or reject the financial markets rescue plan, and market
liquidity is poor, dealers said.
"The whole market is just waiting for something out of the
U.S.," a Prague foreign exchange dealer said.
Elsewhere, Romania's high-yielding leu retreated from the
day's highs and traded 3.742 to the euro, still firmer by 0.21
percent from Tuesday.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.503 24.510 +0.03% +7.53%
Polish zloty <EURPLN=> 3.394 3.386 -0.24% +5.74%
Hungarian forint <EURHUF=> 242.850 241.520 -0.55% +3.95%
Croatian kuna <EURHRK=> 7.103 7.090 -0.18% +3.05%
Romanian leu <EURRON=> 3.742 3.750 +0.21% -4.52%
Serbian dinar <EURRSD=> 76.73 76.62 -0.14% +2.58%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +1 basis points to 23bps over bmk*
5-yr T-bond CZ5YT=RR +3 basis points to +21bps over bmk*
10-yr T-bond CZ9YT=RR +10 basis points to +41bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR +3 basis points to +605bps over bmk*
5-yr T-bond HU5YT=RR +7 basis points to +554bps over bmk*
10-yr T-bond HU10YT=RR -5 basis points to +403bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1632 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
(Reporting by Reuters bureaus, writing by Sandor Peto;
Editing by Toby Chopra)
