Slovak crown extends losses on euro target worry

...recalculate local budget data may delay euro 
adoption from the planned 2009, traders said. 
    The crown eased as far as 34.175 per euro  on 
Monday, the weakest level since June 15, compared with 34.070 
late on Friday. 
    The unit rebounded from intraday lows in afternoon activity, 
to 34.135 per euro at 1210 GMT. 
    Regional peers, Polish zloty and Hungarian forint, which 
often influence the crown, were a touch stronger on Monday. 
    "London banks continue to buy euros (against the crown)," 
said Slovenska Sporitelna dealer Vladimir Gajdos. "The reason is 
worries that we won't adopt the euro as planned," Gajdos said. 
    Eurostat, the European Union's statistical service, demands 
Slovakia to recalculate its 2006 and 2007 budget data, which may 
result in higher fiscal deficits. The crown has lost 1.45 
percent since the Eurostat demand was revealed on Sept. 13. 
    Government and central bank officials have said any changes 
to 2007 fiscal gap, the key for Slovakia's goal to join the euro 
zone in 2009, will not threaten the euro entry timetable. 
    The finance ministry expects the 2007 fiscal gap to be 
revised by no more than 0.27 percent of GDP, which should still 
keep the country under the 3 percent limit for euro adoption. 
    "People reckon it may add a bit to the deficit... though the 
selloff seems a bit excessive as I think budget deficit will be 
well below 3 percent of GDP," said Nigel Rendell, currency 
strategist at Calyon. 
    "But the background in global markets is uncertain, and 
people are cautious about buying anything that may be 
vulnerable," he added. 
    The Eurostat is expected to publish its findings on Slovak 
fiscal calculations by the end of September. 
    The Slovak crown, the fastest growing currency in central 
Europe last year thanks to accelerating economic growth and euro 
adoption prospects, is now down 4.2 percent from its all-time 
high of 32.710 per euro seen in March. 
--------------- MARKET SNAPSHOT AT 1210 GMT ------------------- 
 Crown/euro at 34.135 vs 34.070 on Friday (-0.19 pct) 
 Crown/dollar  at 24.190 bid vs 24.080 
 5-yr bond yld due Mar 2012  at 4.499/4.278 pct 
10-yr bond yld due April 2017  at 4.850/4.650 pct 
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