Slovak crown firms to 6-wk highs, more gains seen

    The Slovak crown firmed to 
nearly six-week highs to the euro on Wednesday, extending gains 
from the previous session, and dealers said the unit might test 
even stronger levels if the regional sentiment remains positive. 
    The crown surged 0.8 percent against the euro on Tuesday on 
the back of surprisingly strong economic growth data and the 
central bank's (NBS) repo auction result. 
    At 0930 GMT, the crown traded at 34.330 per euro , 
compared with a six-week high of 34.250 seen in early trade. It 
stood at 34.400 late on Tuesday. 
    "Yesterday's GDP data and the repo auction back the crown," 
said VUB bank dealer Laco Benedek. "The crown should continue 
firming as economic fundamentals are seen supportive." 
    Slovakia's GDP grew by 9.5 percent in the fourth quarter, 
proving the country is one of Europe's hottest economies. 
    The NBS accepted all bids in its repo tender on Tuesday, 
which analysts said showed the bank seemed to be more relaxed 
about the crown's strength. The bank left the market swimming in 
excess liquidity last month to tame the crown's gains. 
    The crown is now trading 10.8 percent above its central 
parity within the Exchange Rate Mechanism 2 (ERM 2), which the 
Slovaks joined late in November 2005. 
------------------ MARKET SNAPSHOT AT 0930 GMT ----------------- 
Crown/euro  34.330 vs 34.400 on Tuesday (+0.20 pct) 
Crown/dollar   26.215 vs 26.402 (+0.71 pct) 
5-yr govt bond  yield 4.287/123 vs 4.320/100 pct 
7-yr govt bond  yield 4.336/204 vs 4.375/155 pct 
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[BRATISLAVA/Reuters/Finance.cz]