Slovak crown erases early gains vs euro, seen strong

    BRATISLAVA, Nov 2 (Reuters) - The Slovak crown erased early 
gains to the euro by midday on Thursday, but dealers said a 
stronger currency was likely given the positive regional mood. 
    At 1035 GMT, the crown was quoted at 36.330 per euro bid 
<EURSKK=>, compared with Tuesday's close of 36.270/305 and last 
week's lifetime peak of 36.250. The market was closed for a 
national holiday on Wednesday. 
    "Some London-based banks were selling euros in the morning, 
pushing the crown as far as 36.250/290. It was clearly the 
regional positioning," said Tatra Banka dealer Boris Somorovsky. 
    Dealers said the crown did not react to the release of 
January-October state budget data, which showed the budget gap 
shrank significantly from a year ago. 
    The central bank held its benchmark two-week repo rate at 
4.75 percent on Tuesday, citing an improved inflation outlook. 
Most analysts expected a 25 basis-point hike. 
    Traders said the crown may test again the crucial 36.250 per 
euro level in the near term if bullish sentiment in neighbouring 
markets holds. 
    The outcome of a rate-setting meeting of the European 
Central Bank (ECB) later on Thursday will influence investors' 
appetite for emerging risk, dealers said. The ECB is expected to 
hold its key rate at 3.25 percent. 
----------------MARKET SNAPSHOT AT 1035 GMT------------------- 
Crown/Euro <EURSKK=> 36.330 vs 36.270 on Tuesday (-0.23 pct) 
Crown/Dollar <SKK=>  28.435 vs 28.418 (-0.15 pct) 
5-yr govt bond <SK5YT=RR> yield unchanged at 4.644/445 pct 
8-yr govt bond <SK8YT=RR> yield 4.410/209 vs 4.515/4.319 
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 ((Reporting by Martin Dokoupil, editing by David 
Christian-Edwards; Reuters Messaging: 
martin.dokoupil.reuters.com@reuters.net; +421 5341 8402)) 
  Keywords: MARKETS SLOVAKIA CROWN MIDDAY