Slovak crown at 6-week highs, correction seen

    The Slovak crown firmed to 
six-week highs on Wednesday on positive domestic economic news 
and bullish regional sentiment, but some players said a downward 
correction appeared to be loooming in the near term. 
    The crown firmed as far as 34.250 per euro early in the 
session, its strongest level since Jan. 3, but eased back to 
close at 34.320. It was at 34.400 per euro late on Tuesday. 
    The local factor behind the rise was the lasting impact of 
faster-than-predicted 9.5 percent GDP growth for the fourth 
quarter of 2006, released on Tuesday, dealers said. 
    However, some analysts said the crown looked poised for 
correction after its 1.3 percent gain so far this week. 
    "The coming days might be somewhat more negative and we 
suspect that the crown will correct to weaker levels," ING Bank 
wrote in a market note. "A backward move to 34.800-35.000 per 
euro range might be on cards by Friday." 
    The unit is now 10.8 percent above the central parity within 
the Exchange Rate Mechanism 2 (ERM 2), which Slovakia joined in 
November 2005 as part of its plan to adopt the euro in 2009. 
------------------ MARKET SNAPSHOT AT 1550 GMT ----------------- 
Crown/euro  34.320 vs 34.400 on Tuesday (+0.23 pct) 
Crown/dollar   26.122 vs 26.402 (+1.07 pct) 
5-yr govt bond  yield 4.318/097 vs 4.320/100 pct 
7-yr govt bond  yield 4.374/154 vs 4.375/155 pct 
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[BRATISLAVA/Reuters/Finance.cz]