Slovak crown hits record high on regional mood

    The Slovak crown hit a record 
high of 34.580 against the euro late on Wednesday, firming 0.8 
percent on a bullish regional mood which outweighed the central 
bank's (NBS) decision to leave rates on hold, dealers said. 
    The crown showed little reaction to the outcome of the NBS' 
policy meeting, which left the key rate at 4.75 percent, a 125 
basis-point premium over the euro zone benchmark. 
    But the unit picked up steam later in low-key, holiday trade 
after the fellow Czech crown raced to a lifetime high against 
the euro. 
    "The firming was driven by the regional sentiment. I see the 
next key level at around 34.300," said HVB bank dealer Marian 
Sulko. 
    At 1620 GMT, the crown traded at 34.605 per euro , 
compared with 34.890 late on Tuesday. The rally lifted the crown 
from a one-week low of 35.030 hit in the previous session. 
    The NBS knocked the unit off a previous record of 34.620 
last week, saying its rise was too fast and not in line with 
fundamentals. 
    The crown's strength was also behind the bank's Wednesday 
decision to leave lending costs flat for the third month in a 
row, analysts said, as it was helping to stem inflation in 
Slovakia's booming economy. 
    Traders said the crown did not react to a release by Fitch 
Ratings, which affirmed the country's foreign currency debt 
rating at 'A' with stable outlook. 
    The agency said improvement in ratings outlook will depend 
on the maintenance of fiscal discipline and increased confidence 
that inflation is trending towards the euro adoption criteria. 
Slovakia plans to enter the euro zone in 2009. 
----------------MARKET SNAPSHOT AT 1620 GMT------------------- 
Crown/Euro  34.605 vs 34.890 on Tuesday (+0.78 pct) 
Crown/Dollar  26.248 vs 26.490 (+0.71 pct) 
5-yr govt bond  yield unchanged at 4.350/4.151 
8-yr govt bond  yield 4.267/4.067 pct vs 4.358/4.158 
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[BRATISLAVA/Reuters/Finance.cz]