Czech crown dips,seen soft on emerging mkt jitters

PRAGUE, Sept 20 (Reuters) - The Czech crown dipped slightly early on Wednesday, testing support at the 28.500 level versus the euro.

The currency stood at 28.510 at 0800 GMT, down 0.19 percent from late on Tuesday.

Bank CSOB said in a report it expected sentiment to be rather soft due to unrest in Hungary and a military coup in Thailand, but any fallout should be limited.

"Today will be softer again due to continued tension on emerging markets," CSOB said.

"On the other hand, falling yields on global markets ahead of the Fed meeting (later on Wednesday) should tame the negative sentiment," it added.

Central bank board member Michaela Erbenova told daily Mlada fronta Dnes that state finances were not under control and there was time to start discussing a new euro adoption plan after the 2010 target fell through.

The crown has lost nearly 2 percent since hitting a life-time high of 27.955 per euro in early August, hurt by investor concerns about weakening export momentum and limited prospect of bold reforms to curb a burgeoning budget deficit.

But the central bank (CNB) has opened the door to a possible 25 basis point interest rate hike at its Sept. 27 session, which analysts said could help underpin the currency. The key Czech rate is a record 75 basis points below the euro zone benchmark.

The CNB last raised rates, by 25 basis points, in July to contain inflation in an economy growing at a record 6 percent. ----------------- MARKET SNAPSHOT AT 0802 GMT ----------------- Crown/euro <EURCZK=> last deals at 28.510 (-0.19 pct) Crown/dollar <CZK=> at 22.483 bid (-0.42 pct)

5-year yield due Oct 2010 <CZ5YT=RR> 3.64 pct bid (-1 bps) 10-year yield due Jan 2016 <CZ10YT=RR> 3.87 pct bid (0 bps)

5-yr CZK/EUR mid yield spread <DE114147=> -6 bps (vs -6) 10-yr CZK/EUR mid yield spread <DE113529=> 10 bps (vs 9)

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

((Reporting by Jan Lopatka, editing by Stephen Nisbet; prague.newsroom@reuters.com; Reuters Messaging: jan.lopatka.reuters.com@reuters.net; +420-224 190 474))

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Keywords: MARKETS CZECH CROWN MORNING