Czech crown hugs range, eyes c.bank rate verdict

PRAGUE, Oct 24 (Reuters) - The Czech crown hugged a narrow range against the euro on Tuesday, watching other emerging markets for impetus and waiting for the central bank to offer clues about its policy outlook at a Thursday meeting.

The crown traded 0.1 percent weaker at 28.380 per euro <0#EURCZK=> by 1420 GMT, locked in a range of between 28.300 and 28.400. The Czech currency has underperformed central European peers this month, losing quarter of a percent to the euro.

"We believe the crown will continue to trade range bound until emerging markets take a clear path," currency strategists at bank BNP Paribas said in a report.

Investors trimmed positions in emerging market currencies ahead of a U.S. Federal Reserve meeting ending on Wednesday, partly also because of local political and inflation worries.

The Fed is expected to hold rates at 5.25 percent but investors are unsure if interest rates have indeed peaked as some Fed policy makers have expressed concern over inflation.

The Czech central bank was also almost universally expected to keep policy on hold. Only two of 24 economists in a Reuters poll predicted a 25 basis point interest rate increase this week. For a news report, double click on [ID:nL20451838].

The rest saw the main policy rate remaining at 2.50 percent, the lowest level in the EU along with Sweden, after 25 basis point increases in July and September aimed at keeping inflation at bay as household demand steps up a gear.

----------------- MARKET SNAPSHOT AT 1420 GMT ----------------- Crown/euro <EURCZK=> last deals at 28.380 (-0.12 pct) Crown/dollar <CZK=> at 22.621 bid (-0.23 pct)

5-year yield due Oct 2010 <CZ5YT=RR> 3.65 pct bid (+2 bps) 10-year yield due Jan 2016 <CZ10YT=RR> 3.88 pct bid (+3 bps)

5-yr CZK/EUR mid yield spread <DE114147=> -15 bps (vs -18) 10-yr CZK/EUR mid yield spread <DE113529=> 1 bps (vs -2)

Current levels versus prior domestic close at 1500 GMT ---------------------------------------------------------------

((Reporting by Marek Petrus; Editing by David Christian-Edwards; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

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Keywords: MARKETS CZECH CROWN CLOSE