Czech crown hits 3-mth lows, eyes trade data, ECB

...renewed widening of the yawning yield gap versus Europe's single currency and a rise in profit outflows.

The crown traded little changed on the day at 28.388 per euro by 1030 GMT, having earlier slid to 28.400, the lowest level since the end of February.

Analysts said investors looked ahead to April foreign trade data , due for release at 9 a.m. (0700 GMT) on Wednesday, for clues about the strength of export and import growth in the economy, growing at a 6 percent annual clip.

"The market may be reluctant to buy EURs prior to trade data," Lucy Bethell, strategist at The Royal Bank of Scotland.

"However, we don't expect the trade surplus to surprise on the upside, which will leave upside risks for EUR/CZK in place as the crown heads into dividend season," she added.

Analysts polled by Reuters gave a median forecast for a 2.2 billion crown ($104.7 million) monthly surplus in April, following a 12.4 billion surplus in the prior month .

Expectations that the European Central Bank will raise rates to 4 percent on Wednesday and signal more monetary tightening to come were keeping the crown on a weak footing [ID:nL04577078].

The widely-expected 25 basis point ECB rate increase is set to boost the gap between euro zone credit costs and the lower Czech rates to 125 basis points, back to where it was before a quarter-point Czech central bank policy tightening last month.

Analysts said outflows of funds by foreign investors seeking to repatriate dividends on their investment in the Czech Republic were expected to pick up over the summer, which would also undermine the crown.

----------------- MARKET SNAPSHOT AT 1034 GMT ----------------- Crown/euro last deals at 28.388 (-0.05 pct) Crown/dollar at 20.984 bid (+0.20 pct)

5-year yield due Oct 2010 3.84 pct bid (+2 bps) 10-year yield due Jan 2016 4.23 pct bid (+6 bps)

5-yr CZK/EUR mid yield spread -65 bps (vs -65) 10-yr CZK/EUR mid yield spread -24 bps (vs -27) Current levels versus prior domestic close at 1500 GMT ---------------------------------------------------------------