Central East European currencies gain

Hungary's forint and Poland's zloty looked set to end March with their biggest quarterly gains versus the euro in years, despite an emerging European rally losing steam on economic concerns and unease over Budapest's slow progress in getting aid. Euro zone ministers agreed on Friday to beef up the currency zone's rescue fund, giving support to central European stocks, bonds and currencies.
The forint led currency gains and was on target for its biggest quarterly rise in almost three years, according to Reuters data, with a flood of cheap European Central Bank funds having boosted investor appetite since December in a region that has been smothered by the euro zone debt crisis.
The zloty has gained 7.5 percent since the start of the year - its biggest rise for a decade - while the forint is up 6.9 percent. Both have clawed back a fair portion of their more than 10 percent losses in 2011 when the euro crisis escalated and led to fears over Hungary's financing.
The forint, the region's most volatile currency, firmed 0.7 percent to 294.4 per euro. The zloty added 0.3 percent to 4.152 while the Romanian leu was flat at 4.38. The region's main stock indices firmed 0.4-1.3 percent, led by Bucharest and tracking western European peers. The twists and turns of the euro zone debt crisis have weighed heavily on Central Europe, where the euro is a reference currency and most exports go to the west of the continent. A slowdown in export markets is shrinking growth this year, with the Czech economy already in recession.
The Czech central bank left rates on hold at record lows on Thursday and the country's crown extended losses on Friday, shedding 0.2 percent versus the euro to 24.785. It has gained 3 percent this quarter after dropping a similar amount last year. "Technically, we will be buying (EUR/CZK) dips and I think we've already seen the bottom (on EUR/CZK) and will be correcting in the next few weeks and months," a Prague dealer said. Romania's central bank delivered a fourth consecutive quarter-point interest rate cut on Thursday to help the economy, bringing borrowing costs to a record low 5.25 percent.