UPDATE 1-Slovak crown firms to new all-time highs

(Adds analyst comment, background)

BRATISLAVA, Oct 11 (Reuters) - The Slovak crown firmed to all-time highs against the euro on Wednesday, boosted by a bullish mood on European emerging markets and positive news about the government's fiscal plans, dealers said.

The crown firmed to 36.900 per euro early in the session, before retreating to 36.955 on quick profit taking as of 0730 GMT. The unit traded at 37.000 per euro late on Tuesday, and the previous all-time high was 36.925 from March.

The crown has been firming in the past two weeks, mainly thanks to a firming sentiment on central European markets, which traditionally have a strong influence for the Slovak currency.

Traders said news that Slovakia's 2007 state budget draft appeared consistent with its ambition to adopt the euro in 2009 has also boosted the currency this week.

Analysts said Slovakia's economic fundamentals had long supported crown appreciation, but markets turbulence after election of a leftist government in a June vote had put the unit under pressure and delayed the firming drive.

"The economy is growing in a solid pace, foreign direct investment inflow continues and productivity is rising, so all the factors speaking in favour of crown appreciation are there," said Slovenska Sporitelna analyst Maria Valachyova.

Slovakia has been posting one of the highest economic growth rates in the European Union in the past four years, and the real gross domestic product is expected to rise by 6.7 percent this year.

However, the crown had been under pressure for several weeks after the government of leftist Prime Minister Robert Fico replaced the centre-right administration of Mikulas Dzurinda in a June 17 election.

Investors had worried Fico's pre-election promises of more social spending would boost the fiscal deficit and lead to a delay in euro adoption from the current target year of 2009.

But the finance ministry has prepared a 2007 budget draft that sets the fiscal deficit at 2.9 percent of GDP, which is just below the 3.0 percent threshold required for entering the euro zone.

The government is expected to debate the 2007 fiscal plan later on Wednesday.

((Reporting by Peter Laca, editing by Ruth Pitchford; peter.laca@reuters.com; Reuters Messaging: peter.laca.reuters.com@reuters.net; +421-2 5341 8402))

Keywords: MARKETS SLOVAKIA CROWN