* Zloty weaker ahead of quarterly C/A data
* C.bank says larger revisions not now, can come in June
* Romanian cbank keeps benchmark interest rate flat
* Forint firms as high interest rates attract investors
(Edits, adds quotes, fixed income)
By Marcin Goettig
WARSAW, March 31 (Reuters) - Central European currencies
were mixed on Thursday, with the zloty remaining at weaker
levels ahead of quarterly balance of payments data and the
forint supported by a high interest rate differential.
Romania's leu <EURRON=> was flat after the central bank left
interest rates unchanged at 6.25 percent on Thursday as
expected. Earlier, it lost about 0.3 percent versus the euro.
Investors have been fretting over the large 'errors and
omissions' category in Poland's balance of payments data that
showed outflows amounting to 4 percent of gross domestic product
in 2010, more than the reported deficit on the current account.
Markets are awaiting the publication of 2010 fourth quarter
data at 1200 GMT on Thursday but comments from the central bank
implied there would be no significant revision for the time
being. []
At 1042 GMT the zloty <EURPLN=> edged 0.1 percent down
against the euro, having weakened on Wednesday after a HSBC note
recommending selling the unit on the risk of a large revision.
"If there is no major revision to the current account data,
then the zloty should gain," Karol Zaluski, head of FX trading
at ING Bank Slaski said. "However, investors will remember the
revision may finally come and the scale of the strengthening of
the zloty may be limited. This is still a considerable risk."
Market players say a risk of upward revision in the current
account deficit could spark a potential selloff of the zloty as
foreign investors are heavily invested in Polish bonds.
A revision of the deficit to above the 5 percent of GDP
level considered risky for a developing country could encourage
investors to close some of their positions, sending yields
higher and the zloty lower.
Polish bond yields were little changed on Thursday as the
market awaited debt supply plans for the second quarter to be
released by 1200 GMT and an interest rate decision from the
Polish central bank due on Tuesday.
Separately, the central bank will also release its household
inflation expectations data at 1200 GMT.
FORINT FIRMS
The Hungarian forint <EURHUF=> gained 0.2 percent, supported
by the high level of its interest rates.
"The forint is benefitting from a higher interest rate
environment and carry trade as other countries in the region,
most notably Poland, are not seen hiking rates very
aggressively," a dealer said.
"The euro is strong, too, as the ECB may hike rates in April
... All this benefits the region, and the forint is now a
regional favourite."
Hungary posted a current account surplus of 366 million
euros in the fourth quarter after a revised 439 million euros
surplus in the third quarter <HUCAQ=ECI>, the National Bank of
Hungary said on Thursday morning. []
The country's bonds have bounced back in recent days after
gains made in the wake of a successful sale of dollar bonds last
week.
Yields were little changed on Thursday after Hungary sold 50
billion forints worth of one-year treasury bills at an auction.
[]
Elsewhere, the Czech crown <EURCZK=> was within its recent
range on the weak side of 24.500 per euro. Czech bond yields
were flat after an auction of 52-week treasury bills.
[]
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.529 24.515 -0.06% +1.92%
Polish zloty <EURPLN=> 4.015 4.012 -0.07% -1.42%
Hungarian forint <EURHUF=> 266.11 266.71 +0.23% +4.46%
Croatian kuna <EURHRK=> 7.374 7.374 0% +0.08%
Romanian leu <EURRON=> 4.115 4.104 -0.27% +2.87%
Serbian dinar <EURRSD=> 103.18 103.57 +0.38% +2.66%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -2 basis points to -3bps over bmk*
7-yr T-bond CZ7YT=RR -3 basis points to +63bps over bmk*
10-yr T-bond CZ9YT=RR +1 basis points to +66bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -4 basis points to +320bps over bmk*
5-yr T-bond PL5YT=RR -3 basis points to +312bps over bmk*
10-yr T-bond PL10YT=RR -2 basis points to +294bps over bmk*
The P
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -3 basis points to +460bps over bmk*
5-yr T-bond HU5YT=RR -6 basis points to +425bps over bmk*
10-yr T-bond HU10YT=RR -2 basis points to +381bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1242 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, Writing by Marcin Goettig;
editing by Toby Chopra)
