Czech crown extends gains but advance seen capped

PRAGUE, Nov 1 (Reuters) - The Czech crown rose to near three-month highs versus the euro on Wednesday as bullish regional sentiment held up on expectations U.S. interest rates would remain unchanged for a while.

The crown extended its advance into a fourth consecutive session, trading at 28.080 per euro <0#EURCZK=> by 1028 GMT, up quarter of a percent on the day.

The bullish emerging markets tone has benefited the crown this week, despite its yield discount to the euro, but some analysts saw its gains capped at 28.050 as trade was expected to be quiet due to holidays across Europe.

"The cross (EUR/CZK) should remain heavy into trade data on Friday, but watch for progress on the political front," Lucy Bethell, emerging markets strategist at Royal Bank of Scotland in London, said in a report to investors.

A Reuters poll of analysts predicted the September foreign trade surplus at 5 billion crowns <CZFTB=ECI>, helped by falling oil prices, largely flat from 5.3 billion crowns in September 2005. The figures are due on Friday.

President Vaclav Klaus has called for a quick deal to end a five-month stalemate in the lower house, where centre-right parties and leftist parties each control exactly half of the 200 seats after an inconclusive June election [ID:nL31756233].

Analysts said investors would probably welcome early elections, as opinion polls have raised the chances of Topolanek's Civic Democrats forming a strong, pro-reform goverment after a new vote.

----------------- MARKET SNAPSHOT AT 1028 GMT ----------------- Crown/euro <EURCZK=> last deals at 28.080 (+0.23 pct) Crown/dollar <CZK=> at 22.001 bid (+0.25 pct)

5-year yield due Oct 2010 <CZ5YT=RR> 3.57 pct bid (+2 bps) 10-year yield due Jan 2016 <CZ10YT=RR> 3.84 pct bid (+1 bps)

5-yr CZK/EUR mid yield spread <DE114147=> -13 bps (vs -16) 10-yr CZK/EUR mid yield spread <DE113529=> 10 bps (vs 8)

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

((Reporting by Marek Petrus; Editing by Mike Peacock; 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))

- For previous updates on Czech currency moves click on [CZK/]

--------ECONOMIC DATA RELEASES (double click to access)-------- LIVE Czech economic data releases <ECONCZ>

INSTANT VIEWs on Czech economic data [CZ/INSTANT] Factors To Watch in Czech Republic [nCZECH]

---------------------------RELATED NEWS------------------------ Czech FX outlook poll [CZK/POLL] Emerging forex [EMRG/FRX] Hungary market report [FT/] Poland market report [PLN/] All emerging markets news [EMRG] CEE indicators [CONV/DIARY] All east Europe news [EEU] E.Europe equities [.CEE] TOP NEWS -- Emerging markets [TOP/EMRG]

TOP NEWS -- Convergence watch [TOP/EAST] Czech indicators [CZ/ECI] Hungary indicators [HU/ECI] Slovak indicators [SK/ECI] Polish indicators [PL/ECI] --------------------LIVE PRICES & DATA------------------------- Crown Spot Against EUR <EURCZK=> Against USD <CZK=> Czech Bonds <0#CZBMK=> C.Europe Bonds <CEEBONDS> Crown FRAs <CZKFRA=TTKL> Central Bank Fixings <CNB02> Contrib. Cross Rates <CZKX1=> Czech Central Bank <CNB01> -------------------------------------------------------------- HOW TO FIND INFORMATION YOU NEED

|<REUTERS> | <NEWS> | <PHONE/HELP> |

|<EQUITY> | <BONDS>| <MONEY> | <COMMODITY> | <ENERGY> ---------------------------------------------------------------

Keywords: MARKETS CZECH CROWN MIDDAY