BUDAPEST, October 22 (Reuters) - Central European currencies
weakened in unison on Thursday morning as the dollar regained
some of its recent losses to trade below the key 1.50 mark to
the euro, while local data failed to move markets, dealers said.
The Polish zloty <EURPLN=> and the Hungarian forint
<EURHUF=> each slid about half a percent by 0703 GMT, with the
Czech crown <EURCZK=> in tow, sliding a quarter of a percent.
Other regional currencies were broadly unchanged.
Hungarian retail sales continued to slump in August,
recording an annual drop of 7.2 percent, the steepest rate in
more than 20 months as a recent VAT rise and recession ate into
domestic consumer demand. []
A dealer in Budapest said recent ranges should hold on
Thursday as markets lack trend-setting news flow aside from the
changes in the EUR/USD.
The zloty is also expected to take short-term clues from the
dollar, a customary barometer of risk appetite, and corporate
earningns data, a dealer in Warsaw said.
The crown, too, will eye the dollar, a Prague dealer said.
"It looks as though some short dollar covering is coming,
which could put some pressure on our region," he said. "We are
at some crucial levels on EUR/CZK; if we go past 26 we could
move up to 26.30."
The release of the Polish central bank's minutes from the
September meeting of the Monetary Policy Council, due at 1200
GMT, is expected to be neutral for the currency market.
"We expect today's EUR/PLN to be in a range of 4.15-4.20,"
Bank BPH wrote in a morning note to clients.
The zloty could come under weakening pressure if current
privatisation plans fail to materialise, UniCredit analyst Gyula
Toth wrote to clients in a morning note.
"The failure of the Enea privatisation and the postponement
of the deadline for bids for the Stock Exchange... underlines
the risks around the very ambitious Polish privatisation plans,"
Toth wrote.
"Many bullish PLN comments are based on the assumption of
forthcoming privatisation inflows," he wrote. "We see some risks
that EUR/PLN moves a little bit higher in the near term
(probably to around 4.25-30)."
Hungary and Romania will auction government bonds later on
Thursday, with Romania selling 950 million leu of 3-year bonds,
and Hungary in the market with 50 billion forints of a mix of
3-, 5- and 10-year maturities.
"Although the market rallied since Monday we believe that a
recent chunky maturity and still favourable local liquidity
situation provide a supportive near term backdrop," UniCredit's
Toth wrote.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.918 25.85 -0.26% +3.22%
Polish zloty <EURPLN=> 4.185 4.162 -0.55% -1.67%
Hungarian forint <EURHUF=> 265.99 264.54 -0.55% -0.92%
Croatian kuna <EURHRK=> 7.215 7.216 +0.01% +2.08%
Romanian leu <EURRON=> 4.291 4.287 -0.09% -6.45%
Serbian dinar <EURRSD=> 93.12 92.98 -0.15% -3.91%
All data taken from Reuters at 0903 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
(Reporting by Marton Dunai; editing by Chris Pizzey)
