UPDATE 1-Czech crown hits new high before cen.bank meeting

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The Czech crown firmed to an all-time high versus the euro on Wednesday before a central bank meeting which may bring an interest rate rise on Thursday, dealers said.

The crown rose 1.1 percent on the day to as high as 26.42 to the euro , up from a Nov. 9 high of 26.530, before dipping back to 26.44 at 1120 GMT.

It had closed domestic trading around 26.71 on Tuesday.

"We went through 26.500. There was solid interest from London to sell (euros)," said Miroslav Tutter, a senior dealer at CSOB bank. "The market is squeezed, very nervous ahead of tomorrow's central bank meeting. Nobody wants to buy anything."

A Reuters poll showed analysts were almost evenly split between those expecting a 25 basis point rate rise and those forecasting no change in the repo rate, which is now 3.25 percent.

The bank has raised interest rates by 150 basis points over the past two years and indicated more policy tightening as current and forecast inflation rose in the fast-growing economy.

But the crown, which has jumped 8.2 percent from this year's lows in the summer, has been a major anti-inflationary factor.

Ceska Sporitelna trader Viktor Mikulecky said liquidity was thin, amplifying the currency's swings. The crown jumped after the currency failed to break to the weaker side of 26.800, which prompted some investors to square their long euro positions.

"I would not be surprised if we see 26.200 or 26.000 by the end of the year," he said.

(Reporting by Jan Lopatka and Petra Vodstrcilova; editing by Alan Crosby/David Stamp)

Keywords: CZECH CROWN/RECORD

[PRAGUE/Reuters/Finance.cz]