* Forint extends gains after dollar bond
* Crown loses after rates kept on hold, hike looks far off
* Global econ data to be watched later
PRAGUE, March 25 (Reuters) - The forint extended its run to
a 10-month high on Friday after Hungary placed dollar bonds with
international investors amid optimism over fiscal reforms, while
the Czech crown continued to retreat.
The crown <EURCZK=> fell back in the previous session when
the central bank left interest rates at record lows, against
some bets that Czech policymakers would follow Poland and
Hungary in tightening monetary policy. []
The focus on rates in the region now shifts to Hungary,
where a revamped monetary policy council, expected to pay more
attention to the government's demands that it do more to support
growth, will meet for the first time on Monday.
Analysts expect no change to rates, which rose by 75 basis
points from November to January and they are also confident the
new council, dominated by government appointees, ill not turn
reverse those rises in borrowing costs. []
But there are signs that the bank could consider other
easing monetary policy by taking steps to provide extra
liquidity to the economy -- potentially a risk for the forint
currency.
The forint <EURHUF=>, the region's best performer in the
past week with a 2.7 percent rise, held around 10-month highs
versus the euro in early Friday trade, bid up 0.2 percent at
266.3 by 0836 GMT.
Dealers said it was supported by more risk appetite and
after the country's successful dollar bond sale on Thursday,
when it sold to international investors at prices better than
initial guidance. []
"I don't know how much longer this rally could last given
how much we have firmed over the past days," a Budapest-based
currency dealer said.
"The time may be ripe for a little correction, however, the
fresh euro/Swiss franc levels indicate there is some improvement
in risk appetite, so we may be headed for new highs."
DATA TO GIVE CUES
Dealers said markets would look to data from economic
powerhouses Germany <ECONDE> and the United States <ECONUS>
later in the day for more trading cues.
Germany is a major trade partner for central Europe's
export-reliant economies, like the Czech Republic and Hungary.
The crown <EURCZK=> dipped 0.1 percent to near a 1-1/2 week
low, while the Polish zloty <EURPLN=> and Romanian leu <EURRON=>
were mostly steady.
The euro steadied following a European agreement on Thursday
to increase their financial rescue fund, while avoiding
discussion of Portugal, which is under pressure to seek a
bailout. []
In the Czech Republic, markets have priced in a first rate
hike by mid-year, but the bank on Thursday did not give any
indication that it would rush to tighten policy.
This could keep some pressure on the safe-haven crown, which
had been a gaining leader in central Europe until last month.
"The comments from Governor Miroslav Singer did not bring
anything surprising and merely confirmed that the Czech central
bank is in no hurry to change the current interest rate
setting," Danske Bank said.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2011
Czech crown <EURCZK=> 24.536 24.515 -0.09% +1.89%
Polish zloty <EURPLN=> 4.017 4.018 +0.02% -1.47%
Hungarian forint <EURHUF=> 266.3 266.82 +0.2% +4.39%
Croatian kuna <EURHRK=> 7.384 7.383 -0.01% -0.05%
Romanian leu <EURRON=> 4.094 4.092 -0.05% +3.4%
Serbian dinar <EURRSD=> 103.4 103.46 +0.06% +2.44%
All data taken from Reuters at 0939 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet)
