(Adds details, quotes)
By Dagmara Leszkowicz and Marius Zaharia
WARSAW/BUCHAREST, Nov 13 (Reuters) - Central European
currencies firmed on Thursday, helped by dollar weakness and a
slight return of risk appetite, possibly due to a Japanese offer
to the IMF of up to $100 billion to help emerging economies.
The dollar fell against the euro <EUR=> after weekly data
showed a sharp jump in initial U.S. jobless claims, sending some
emerging assets higher.
(For details please double click on [])
"The dollar weakness helped the region," one dealer said.
But analysts and traders said the sentiment lift was only
temporary and regional currencies will return to the dark days
they have faced over the past month, as the global crisis scared
investors away from risky assets in vulnerable economies.
These economies, some of them based on exports and some on
high domestic demand, are expected to slow significantly in the
near future.
"The weakening pressures (on central European currencies)
are still there," said Miroslav Plojhar, a JP Morgan analyst.
"Economies are going to slow down or enter a recession, their
exports are falling."
At 1525 GMT the Polish zloty <EURPLN=> had gained 1 percent
to 3.73 per euro and the leu <EURRON=> was up 1.2 percent to
3.783 per euro following three days of falls since Fitch cut
Romania's credit rating to below investment grade.
Hungary's forint <EURHUF=> was up 0.2 percent at 269.67
against the common currency, while the Czech crown <EURCZK=> led
the gains, adding 1.3 percent to 25.163.
"The market just got itself overly bearish, and the flows
aren't there to sustain the movements," a London-based currency
dealer said.
The dealer added that Japan's offer to the International
Monetary Fund had temporarily helped sentiment in the region but
he said the boost was unlikely to last. [])
In Poland, central bankers said that interest rates should
stay flat at least until January 2009 and a decision will depend
on economic growth data. [] []
Hungary launched a $7 billion economic stimulus package to
lift the country out of a recession but the central bank warned
that recovery would be slow. []
Some central and eastern European states' high exposure to
foreign credit spooked investors last month, sending Hungary and
Serbia, among others, to seek IMF help.
The region's export-driven economies have also come under
strain as euro zone demand wanes, while ambitions from some
countries to join the euro have also come into question in the
current market tension.
Hungarian Finance Minister Janos Veres said his country aims
to meet the economic criteria to enter ERM-2 in 2009
[].
In Poland, Prime Minister Donald Tusk said on Wednesday that
his plan to adopt the euro in 2012 would be delayed if the
government and opposition cannot reach agreement on the issue
[].
"These comments were quite pessimistic and I expect the
Polish currency may test 'abstract' levels above 3.80 against
the euro," said Ernest Pytlarczyk, head of Financial Markets
Research at BRE bank in Warsaw.
Hungarian government bond yields dropped slightly after
steep rises in the past few days. The debt management agency AKK
sold 30 billion forints worth of 12-month Treasury bills at an
average yield of 12.72 percent [].
"The front end of the curve is slightly lower," one dealer
said. "The (government's 12-month bill) auction was not bad,
though there had been concerns that it would not be sold."
Polish bond yields were also slightly lower.
In other trade, the Serbian dinar <EURRSD=> weakened 0.2
percent to 84.757 per euro, with thin liquidity rather than its
levels prompting the central bank to intervene again, selling 10
million euros.
The Croatian kuna <EURHRK=> was 0.3 percent up to 7.118 per
euro.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 25.163 25.49 +1.28% +5.03%
Polish zloty <EURPLN=> 3.73 3.767 +0.98% -3.6%
Hungarian forint <EURHUF=> 269.67 270.25 +0.21% -6.65%
Croatian kuna <EURHRK=> 7.118 7.137 +0.27% +2.85%
Romanian leu <EURRON=> 3.783 3.828 +1.18% -5.66%
Serbian dinar <EURRSD=> 84.757 84.617 -0.17% -7.61%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +33 basis points to 156bps over bmk*
5-yr T-bond CZ5YT=RR +3 basis points to +137bps over bmk*
10-yr T-bond CZ9YT=RR -11 basis points to +78bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -2 basis points to +421bps over bmk*
5-yr T-bond PL5YT=RR 0 basis points to +357bps over bmk*
10-yr T-bond PL10YT=RR -5 basis points to +273bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -25 basis points to +1084bps over
bmk*
5-yr T-bond HU5YT=RR -27 basis points to +1015bps over
bmk*
10-yr T-bond HU10YT=RR -32 basis points to +578bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1725 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
For related news and prices, click on the codes in brackets:
All emerging market news []
Spot FX rates Eastern Europe spot FX <EEFX=>
Middle East spot FX <MEFX=> Asia spot FX <ASIAFX=>
Latin America spot FX <LATAMFX=>
Other news and reports
World central bank news [] Economic Data Guide <ECONGUIDE>
Official rates [] Emerging Diary []
Top events [] Diaries [] Diaries Index []
(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz
and Marius Zaharia; editing by David Stamp)
