Emerging Markets-Polish zloty, Czech crown lead FX gains

                                
 * Czech crown, Polish zloty hit new highs
                                
 * Local currencies broadly up on interest rate outlook
                                
 * Emerging stocks softer 
                                
 
                                
 By Peter Apps
                                
 LONDON, July 14 (Reuters) - The Czech crown and Polish zloty
hit record highs against the euro on Monday, while emerging
equities weakened despite a global stocks relief rally on a
rescue plan for two U.S. mortgage giants.
                                
 The U.S. Treasury and Federal Reserve called on Sunday for
sweeping measures to lend money and buy equities in mortgage
lenders Freddie Mac <FNM.N> and Fannie Mae <FRE.N>, trying to
calm investors after both stocks lost more than 40 percent last
week on fears they were undercapitalised.
                                
 The rescue bid perked up risk appetite around the world, and
while Asian emerging share indices were mostly weaker, most
European, Middle Eastern and South African markets rallied.
                                
 Emerging currencies were also broadly weaker, with the zloty
and crown rising from last week's record levels to hit new
highs.
                                
 "Overall, emerging currencies have performed very well
despite everything that has gone on in equities," said Dresdner
Kleinwort foreign exchange strategist Jon Harrison.
                                
 At 1030 GMT, the Czech crown <EURCZK=> was up 0.47 percent
while the Polish zloty <EURPLN=> was up 0.11 percent. The
currencies are up 13 and 11 percent respectively so far this
year.
                                
 The Hungarian forint <EURHUF=> was also at near highs, up
0.53 percent.
                                
 Central European currencies have firmed in the past month as
investors troubled by the global market seek out alternative
investments and position themselves for higher interest rate
hikes in the face of rising inflation.
                                
 "It's a continuation of the trend from the past few weeks
will be seen strong outperformance from regional currencies,"
said Martin Blum, head of emerging macroeconomic research at
Unicredit in Vienna [nL14550484].
                                
 Heightened risk appetite also pushed relative
underperforming emerging currencies to the fore, with South
Africa's rand <ZAR=> up 0.62 percent and the Turkish lira <TRY=>
up 0.35 percent against an itself broadly stronger dollar.
                                
 Emerging sovereign debt spreads <11EMJ> narrowed four basis
points to 297 above U.S. Treasuries.
                                
 But the Kenyan shilling <KES=> was 1.33 percent weaker,
weighed down by concerns over a weak economy and the rising cost
of importing oil.
                                
 The East African currency had broadly recovered from losses
earlier in the year when post-election violence paralysed the
country, but is now down to 5.91 percent on the year with the
appointment of a new finance minister doing nothing to support
the unit [nL14249982].
                                
 The Russian rouble strengthened against the dollar/euro
basket on Monday, with dealers saying the central bank and
allowed the move to further combat inflation. 
                                
 It was the second time the bank had allowed the currency to
strengthen in a week as inflation -- running at an annualised
rate of 15 percent -- has become one of the government's biggest
headaches [nL14557887].
                                
 Benchmark emerging equities <.MSCIEF> were 0.30 percent
weaker, with Romanian stocks <.BETI> down 1.32 percent.
                                
 Czech equities <.PX> were up 0.39 percent, with Russian
stocks <.IRTS> up 0.99 percent and Turkish <.XU100> up 1.39
percent.