Emerging European currencies little changed

Emerging European currencies were little changed on Friday, propped up by expectations of continued loose US monetary policy, while the prospect of more interest rate cuts in Hungary was seen keeping pressure on the forint. Emerging markets worldwide have profited from judgement US debt deal removed risk to all economies around the world, and emerging markets have profited duly.
Prague's stock market hit a five-month high in early trade. "It's mostly a mirage but it works," a dealer said in Budapest. "While there is free money it doesn't really matter what happens in the economies of the world, be it China or the US or Europe. The balloon bounces along and doesn't pop." Erste Bank analysts wrote in a note that the forint, which has traded at a three-month high against the euro, has a chance to weaken as markets weigh the Hungarian government's plans to reduce mortgage payments for foreign currency borrowers and the central bank's moves to reduce interest rates further.
The central bank's chief economist on Thursday said there was still room for easing after the bank cut its main interest rate nearly in half to 3.6 percent over the last 14 months. The forint was roughly unchanged in morning trade, while the Czech crown, Polish zloty and Romanian leu were all very slightly lower.
European stocks rose, taking fuel from China, whose economy grew the most this year in the third quarter. Prague was the leader in a mixed performance in emerging Europe. "The mood is driven by the positive sentiment on global markets, (and) the move in Telefonica Czech Republic is helping," Komercni Banka analyst Josef Nemy said. "The index is very close (to the 1,000 point level) so it could be a matter of days (before breaking it)."
Telefonica Czech Republic, a unit of the Spanish telecom group Telefonica, hit a nine-month high this week after the Spanish parent said it was talking to Czech investment group PPF over a possible sale of its stake. Central European Media Enterprises (CME) led gains in Prague, rising 5 percent after its shares jumped on the Nasdaq in the previous session.