(Adds details, fixed income)
PRAGUE, Sept 8 (Reuters) - The Hungarian forint <EURHUF=>
jumped on Monday, driven by losses for the dollar after the U.S.
government's seizure of the country's two mortgage giants.
The forint gained 1 percent to 240.3 per euro against
Friday's domestic close, trimming gains of as much as 2 percent
as the greenback recovered some ground in morning trade.
The move led gains for Central Europe's other emerging
currencies, which tend to gain on dollar weakness, with Poland's
zloty <EURPLN=> inching up to 3.455 per euro by 0753 GMT, from
3.458.
Romania's leu <EURRON=> rose 0.4 percent to 3.592 per euro,
while the Croatian kuna <EURHRK=> was steady at 7.13 per euro as
demand from the tourist season eased and Serbia's dinar
<EURRSD=> edged up to 76.59 from 76.62 against the euro.
Dealers said the takeover by authorities of Fannie Mae and
Freddie Mac on Sunday had shored up global risk appetite,
benefitting higher-yielding currencies.
"The news triggered a sell-off in the dollar and money began
pouring back into emerging assets; the forint and the zloty are
all up this morning," a Budapest dealer said.
The dollar's recent rally has hit regional currencies as
investors shifted positions from emerging market assets to those
denominated in the U.S. currency.
The Czech crown <EURCZK=> bucked Monday's trend, dipping 0.1
percent to 24.933 per euro after August inflation data came in
below forecasts, adding to expectations the central bank will
cut interest rates by the start of next year [].
"It's positive and we can think about a future (interest
rate) cut, which could occur in the first quarter next year,"
said Petr Dufek, an analyst at bank CSOB.
The Czech bank was the first to ease policy in the region in
August amid signs the economy looked set to slow -- as elsewhere
in former communist central Europe -- due to falling demand in
the euro zone, the region's largest trade partner.
In fixed-income trading, Polish bonds inched higher, while
Hungarian bonds rallied 10 to 15 basis points.
"The U.S. government saved markets for now," a dealer said.
"How long this sentiment change will last is uncertain but
there's a rally everywhere and bonds are benefiting.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.933 24.915 -0.07% +5.9%
Polish zloty <EURPLN=> 3.455 3.458 +0.09% +4.04%
Hungarian forint <EURHUF=> 240.300 242.69 +0.98% +4.96%
Croatian kuna <EURHRK=> 7.132 7.133 +0.01% +2.65%
Romanian leu <EURRON=> 3.592 3.606 +0.39% -0.33%
Serbian dinar <EURRSD=> 76.590 76.620 +0.04% +2.76%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR -8 basis points to 1bps over bmk*
5-yr T-bond CZ5YT=RR -5 basis points to +14bps over bmk*
10-yr T-bond CZ9YT=RR -3 basis points to +34bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR -13 basis points to +218bps over bmk*
5-yr T-bond PL5YT=RR -10 basis points to +209bps over bmk*
10-yr T-bond PL10YT=RR -9 basis points to +187bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -24 basis points to +508bps over bmk*
5-yr T-bond HU5YT=RR -26 basis points to +460bps over bmk*
10-yr T-bond HU10YT=RR -19 basis points to +378bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1032 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet, editing
by Mike Peacock and Patrick Graham)
