* CEE currencies up slightly, helped by euro
* German approval of safety net package could also help
BUDAPEST, May 21 (Reuters) - Central European currencies
were a shade firmer on Friday, helped by the euro strengthening
against the dollar and the Swiss franc, but a sell-off on U.S.
and Asian stock markets weighed on sentiment.
Germany is expected to approve on Friday its share of a $1
trillion safety net for troubled euro zone states. Germany's
lower house of parliament is due to vote on the package at
around 1000 GMT [].
If the package is passed, some dealers said that could
support investor sentiment battered by the euro zone debt
crisis, Germany's ban on naked short selling earlier this week
and growing market fears of more stringent financial regulation.
"I think there could be a strengthening today on the USD
correction ... and the forint might firm to around 278 versus
the euro," a Budapest currency dealer said.
"And then if the Germans pass the rescue package, that could
be forint-supportive as well."
Another dealer said the forint would likely trade in tight
ranges around 280 to the euro as a plunge in U.S. and Asian
stock markets was limiting an improvement in sentiment.
At 0726 GMT, the Polish zloty <EURPLN=> was up 0.4 percent,
the Hungarian forint <EURHUF=> was 0.3 percent higher, and the
Czech crown <EURCZK=> was steady.
The Romanian leu <EURRON=> was 0.1 percent higher.
Danske Bank said in a note that the zloty was fundamentally
undervalued at its current levels and should recover.
"Given the strong sell-off in the zloty, the PLN is now
trading at fundamentally undervalued levels relative to
long-term fair value levels ... Hence, if the zloty is trading
above 4.21 against the euro, we recommend selling EUR/PLN."
Stock markets were mixed with Budapest <> down 0.4
percent, Prague <> down 0.2 percent and Warsaw up 0.9 percent
<> at 0743 GMT.
Despite a climate of risk aversion, the region's debt
tenders on Thursday drew solid demand as investors see central
Europe's debt picture as better than some other parts of the
euro zone.
Hungary sold 50 billion forints of government bonds.
[]
Romania surprised markets by selling the full planned 700
million lei ($206 million) in 10-year treasury bonds, with an
average accepted yield of 7 percent, barely changed from a
tender in April. []
Analysts had expected the finance ministry to reject all
bids after fears that it would not be able to see through
planned wage and pension cuts in the face of mounting opposition
caused two debt tenders to fail earlier this month.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.816 25.816 0% +1.94%
Polish zloty <EURPLN=> 4.132 4.149 +0.41% -0.68%
Hungarian forint <EURHUF=> 279.72 280.51 +0.28% -3.35%
Croatian kuna <EURHRK=> 7.262 7.259 -0.04% +0.65%
Romanian leu <EURRON=> 4.195 4.199 +0.1% +1.01%
Serbian dinar <EURRSD=> 102.32 101.75 -0.56% -6.29%
All data taken from Reuters at 0926 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Krisztina Than; Editing by Kevin Liffey)
