Slovak crown flat, market eyes region, U.S. data

    The Slovak crown was little 
changed against the euro in early trade on Thursday hovering in 
sight of six-week highs with dealers saying U.S. data and 
regional sentiment would set the unit's short-run direction. 
    The crown rose to 34.250 per euro on Wednesday, fuelled by a 
mix of bullish domestic and external impulses, such as 
stronger-than-expected 9.5 percent GDP growth for the fourth 
quarter and brighter regional sentiment. 
    The crown traded at 34.330 to the euro  as of 0950 
GMT, barely changed from 34.320 at the close on Wednesday. 
    "As the domestic calendar is empty today, the crown is 
expected to remain driven by external factors," KBC Bank wrote 
in a market note. "The unit has potential for further 
appreciation in the days ahead". 
    Traders said they saw the crown floating between 
34.200-34.500 per euro. 
    However, the crown's rise by 1 percent since Monday has 
sparked investors fears that the central bank could try to knock 
it back down through verbal intervention as it has done before. 
    "We are aware of the fact that the central bank does not 
like the crown close to the 34.0 per euro level," KBC Bank said. 
"If the unit approaches this area, the probability of verbal 
intervention will increase." 
    The crown is trading 10.8 percent above the central parity 
within the Exchange Rate Mechanism 2 (ERM 2), which Slovakia 
entered in November 2005 as part of its plan to adopt the euro 
in 2009. 
------------------ MARKET SNAPSHOT AT 0950 GMT ----------------- 
Crown/euro  34.330 vs 34.320 on Wednesday (-0.03 pct) 
Crown/dollar   26.124 vs 26.122 (-0.01 pct) 
5-yr govt bond  yield 4.287/124 vs 4.318/097 pct 
7-yr govt bond  yield 4.333/201 vs 4.374/154 pct 
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[BRATISLAVA/Reuters/Finance.cz]