* German data, Greece woes hit risk appetite
* Leu slightly up as c.bank intervenes, dealers say
(Adds fixed income, detail)
By Dagmara Leszkowicz and Jason Hovet
WARSAW/PRAGUE, Dec 8 (Reuters) - Hungary's forint led a
retreat for central Europe's currencies on Tuesday after
disappointing German data gave a shaky view of the region's
recovery, although Romania's leu was steady as dealers cited
central bank intervention.
German industrial output unexpectedly fell in October,
pointing to a slowing recovery for Europe's largest economy and
central Europe's main trade partner that will likely drag on the
region's own path to recovery. []
That was coupled with a Fitch ratings agency downgrade on
euro zone member Greece which drove investors out of riskier
emerging market assets. []
Hungary's forint <EURHUF=> fell 1.4 percent to bid at 273.1
to the euro by 1343 GMT. Investors view Hungary as one of the
more fiscally vulnerable countries in the region.
The Polish zloty <EURPLN=> fell 1 percent and the Czech
crown <EURCZK=> 0.5 percent, while stock markets dropped up to 2
percent led by Budapest <>.
"There have been analysts recently who saw similarities
between the fiscal performance of Hungary (before this year's
budget cuts) and Greece," a Budapest dealer said.
"But the (currency) fall is not very intensive or too
sudden... If the weakening continues, 273.50 and 275 could be
the next levels."
Hungary and Romania have both reached out for International
Monetary Fund aid packages to plug financing gaps, but the help
came with budget constraints that analysts say could weaken
their economies in recovery.
CENTRAL BANK HELP?
Romania's aid package has been put on hold due to a
political impasse since a government collapse in October.
President Traian Basescu narrowly won a re-election bid over
the weekend, but the result is being challenged by the
opposition, and his prime minister appointees have had trouble
gaining parliamentary support for a new government that can
restart IMF talks. []
The Fund's representative said on Tuesday the IMF is "pretty
firm" on its demand that Romania pass a 2010 budget with a
deficit of 5.9 percent of gross domestic product. []
The leu <EURRON=> was 0.1 percent off against the euro, with
dealers saying the central bank had resumed intervention on the
market. The bank declined to comment.
"The central bank has intervened indirectly to protect the
leu ... though it is hard to say how big the impact from
politics has been and its influence on currency developments,"
said one Bucharest-based dealer.
A central bank official said curbing currency appreciation
was wise as it helps exports.[]
Analysts agree the worst of the economic downturn has passed
central Europe's export-reliant economies, and data on Tuesday
show Hungarian industry's output dropped slow in October with a
monthly rise that suggested recovery was near. []
The Czech Republic as well as Poland's data already showed
the output drops were lower than expected.
Poland's economy has avoided recession unlike neighbours.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2009
Czech crown <EURCZK=> 25.744 25.605 -0.54% +3.92%
Polish zloty <EURPLN=> 4.11 4.07 -0.97% +0.12%
Hungarian forint <EURHUF=> 273.1 269.36 -1.37% -3.5%
Croatian kuna <EURHRK=> 7.285 7.285 0% +1.1%
Romanian leu <EURRON=> 4.233 4.23 -0.07% -5.16%
Serbian dinar <EURRSD=> 95.24 95.87 +0.66% -6.05%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
3-yr T-bond CZ3YT=RR +4 basis points to 95bps over bmk*
7-yr T-bond CZ7YT=RR +13 basis points to +108bps over bmk*
10-yr T-bond CZ10YT=RR -1 basis points to +91bps over bmk*
All data taken from Reuters at 1444 CET.
Currency percent change calculated from the daily domestic
close at 1700 GMT.
For related news and prices, click on the codes in brackets: All
emerging market news []
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(Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz
and Jason Hovet; Editing by Patrick Graham)
