EMERGING MARKETS-Lira and forint weaken, Ukraine CDS hit 2-mth high

lunes 10 de febrero de 2014 08:58 GYT

(Updates prices, adds Ukraine CDS, Hungary comment, Latam FX)

By Sujata Rao and Carolyn Cohn

LONDON Feb 10 (Reuters) - The lira fell half a percent against the dollar and the forint dropped 1 percent versus the euro on Monday on concern about monetary policy in Turkey and Hungary.

The backdrop for emerging assets was generally positive, however, after weak U.S. jobs data on Friday reduced expectations that the Federal Reserve might speed up the rate of tapering of its monetary stimulus.

The Ukrainian hryvnia continued to extend gains after last week's central bank decision to impose some capital curbs, but debt insurance costs hit two-month highs.

The lira fell 0.5 percent and Turkish stocks eased 0.9 percent after Standard and Poor's cut the outlook on Turkey's rating to negative from stable late on Friday, citing unpredictable policies and risks of economic shocks.

Ulrich Leuchtmann, a currency strategist at Commerzbank in Frankfurt, said the S&P move was hitting sentiment on the lira which has clawed back some January losses after big rate hikes at the end of last month.

"We had quite a good week for the lira last week and there is not much room for further recovery, as the central bank is not creating confidence that it has a monetary policy that makes the lira attractive. The rate hike only took place because the market forced it," Leuchtmann said.

Broader emerging currencies were steady to slightly softer, with the Brazilian real dropping 0.7 percent.   Continuación...