Slovak crown rebounds from one-week low vs euro

    The Slovak crown erased early 
losses against the euro on Tuesday, rebounding from a one-week 
low of 35.030, and dealers said low, pre-holiday liquidity will 
keep the unit volatile in the short run. 
    At 1440 GMT, the crown traded at 34.890 per euro , 
barely changed from Monday's close. The unit firmed to a record 
high of 34.620 last week, but lost some ground following the 
central bank's (NBS) warning that its rise was too fast. 
    "There was a brief spike over 35.0 per euro due to profit 
taking," said Tatra Banka dealer Boris Somorovsky. "This was 
partly caused by stop loss orders from local banks and also by 
regional moves as the Polish zloty weakened slightly." 
    The crown fell 0.8 percent against the euro following the 
NBS' verbal intervention last week, but it is still 4.7 percent 
stronger than a month ago. 
    The market awaits the outcome of the NBS' monthly policy 
meeting on Wednesday, but traders said the crown was likely to 
show little reaction if interest rates stay on hold. 
    All analysts polled by Reuters forecast that the NBS will 
keep the key two-week repo rate at 4.75 percent, as the strong 
currency was helping to stem inflationary pressures. 
    The bank has hiked lending costs by 175 basis points this 
year to curb inflation, which is a key challenge for Slovakia's 
plan to adopt the euro in 2009. 
----------------MARKET SNAPSHOT AT 1440 GMT------------------- 
Crown/Euro  34.890 vs 34.900 on Monday (+0.03 pct) 
Crown/Dollar  26.490 vs 26.690 (+0.76 pct) 
5-yr govt bond  yield 4.350/4.151 pct vs 4.300/4.100 
8-yr govt bond  yield 4.358/4.158 pct vs 4.248/4.048 
-------------------------------------------------------------- 
  

[BRATISLAVA/Reuters/Finance.cz]