RPT-POLL-Czech CZK seen at 27.5/euro in 3 mths, 27.05 in 12 mths

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By Mirka Krufova and Marek Petrus

The Czech crown is expected to hold near 27.50 per euro within three months, a Reuters poll showed on Wednesday, suggesting scant upside room for the currency after its rally to record highs last month.

The crown scaled a lifetime peak of 27.385 per euro on Sept. 17 as investors bought crowns to reverse positions selling the low-yield currency to fund bets on higher-yielding assets, especially in emerging markets such as Hungary and Turkey.

The median forecast in the survey among 16 analyst groups was for the crown to be at 27.50 versus the euro in one month and at 27.45 in three months. The three-month outlook did not change versus a similar poll taken in mid-September.

The crown traded around 27.500 per euro on Wednesday, up 4.6 percent since the start of July when a spike in risk aversion due to a squeeze in global credit markets triggered the first wave of liquidation of high-yield, high-risk carry trades.

"The crown has lost its link to other low-yielding units, the Japanese yen and the Swiss franc. As the story of the crown as a funding currency fades away, it is likely to once again pay more attention to regional units," said Jan Cermak, chief financial markets analyst at the biggest Czech bank CSOB.

"In the three-month outlook, the central bank's return to hawkish rhetoric could give the crown a boost."

The Czech central bank (CNB) has raised interest rates to a five-year high of 3.25 percent as inflation crept up in the booming central European economy, but the crown's sharp firming led it to signal at least a brief pause in further tightening.

The poll saw the crown hitting a new all-time high of 27.20 within six months and 27.05 within a year from now. Both forecast levels were little changed from the previous survey.

** FOR TABLE WITH REGULAR MONTHLY POLL RESULTS, CLICK ON [ID:L10390159] or

Keywords: CZECH FOREX/POLL

[PRAGUE/Reuters/Finance.cz]