(Adds Hungary and Romania detail)
* Hungary's forint gives back some of Friday gains
* Disappointing economic data hit Czech crown
* Romanian leu hits 2-month low, market eyes c.bank
By Sam Cage
BUCHAREST, Oct 8 (Reuters) - Hungary's forint led emergingEuropean currencies lower on Monday, giving back some of theprevious session's sharp gains as questions persist over aninternational financing deal.
Budapest scrapped a disputed tax on its central bank andunveiled a swathe of new measures on Friday to keep its deficitunder control, removing an obstacle to an International MonetaryFund deal and sending the forint up more than 1 percent.
But on Monday, the currencywas bid 0.6 percentlower on the day at 284 per euro by 0916 GMT.
"No wonder we are at these levels now, it's a correction," adealer said. "If we look at monetary policy, what we are havingis a rate-cut cycle, and there is still uncertainty over the IMFdeal. That story is not over yet."
The cost of insuring Hungary's debt against a default forfive years
sank to around 340 basis points, itslowest level since August 2011, but markets will remain on edgeuntil a deal is actually signed.
"A fault confessed is half redressed," Commerzbank said in anote. "Until the EU and IMF give the all clear, risk continuesto concentrate on the upper end in EUR-HUF."
Elsewhere, assets were pressured by a bearish mood on globalstock markets after the World Bank cut growth forecasts for Asiaand underlined concerns over the global economic outlook.
Stocks fell across central Europe, led by a 1 percent dropin Budapest
.The Czech crown
slipped 0.4 percent after datashowed a bigger-than-expected fall in industrial output andraised expectations of a fourth straight quarter of recession.
"The data published today can hardly be interpreted as goodnews for the Czech crown," said Raromir Jac, analyst at GeneraliPPF Asset Management.
LEU LOWSRomania's leu
hit a new two-month low beforeregaining some ground to trade 0.1 percent lower at 4.572 pereuro, as traders tested the level at which the central bankwould step in to support the currency.
The leu is at its lowest since the summer, when it hitall-time lows on political uncertainty caused by a failedattempt by the government to remove the president from office,which also raised doubts over Romania's 5 billion euro IMFbackstop deal.
A parliamentary election is due in December and campaigningand post-vote bargaining could again raise doubts over thecountry's adherence to its international commitments.
"Fears of central bank intervention may have subsided," saidING economist Mihai Tantaru. "It could soften further, eyeing4.60 per euro in a matter of days."
also fell 0.4 percent, with marketsweighing the prospect of monetary policy easing after a centralbanker said he may vote for an interest rate cut in November.
Currency Latest Previous Local Localclose currency currencychange changetoday in 2012Czech crown24.923 24.826 -0.39% +2.5%Polish zloty4.082 4.067 -0.37% +9.38%Hungarian forint284 282.3 -0.6% +10.77%Croatian kuna
7.461 7.478 +0.23% +0.73%
Romanian leu4.572 4.566 -0.13% -5.49%Serbian dinar114.8 114.87 +0.06% -6.84%Yield SpreadsCzech treasury bonds2-yr T-bond CZ2YT=RR +4 basis points to 47bps over bmk*7-yr T-bond CZ6YT=RR +4 basis points to +77bps over bmk*10-yr T-bond CZ10YT=RR -4 basis points to +82bps over bmk*Polish treasury bonds2-yr T-bond PL2YT=RR +1 basis points to +396bps over bmk*5-yr T-bond PL5YT=RR +3 basis points to +362bps over bmk*10-yr T-bond PL10YT=RR +3 basis points to +318bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1216 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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