Slovak SKK quiet in early trade, tight range seen

    The Slovak crown was little 
changed against the euro in early trade on Friday, with traders 
saying it should drift in a tight range in the days ahead taking 
cues from the regional sentiment due to a lack of domestic news. 
    The crown traded at 34.350 per euro  as of 0810 
GMT, a touch weaker from 34.320 late on Thursday and 0.3 percent 
below its six-week high of 34.250 hit on Wednesday. 
    The Slovak currency has rallied by 0.93 percent since 
Monday, fuelled by stronger-than-expected 9.5 percent GDP growth 
in the fourth quarter and an improved mood on regional 
currencies. 
    "It should be quiet (the trading) today and influenced by 
the regional mood," said Slovenska Sporitelna dealer Vladimir 
Gajdos. "The crown should move between 34.300-34.400 per euro 
today." 
    Market watchers said any further gains would be limited by 
outcome of the central bank's (NBS) two-week, liquidity 
draining, repo tender, a monetary policy tool the bank used in 
January to cap the currency's appreciation pace. 
    The NBS rejected some bids in repo tenders this week, 
leaving the market awash in liquidity. 
    Over a multi-week horizon the crown could test weaker 
levels, some analysts said. 
    "This could be either a "natural" process or if the market 
attempts to test central bank's limits and push the currency 
stronger, the central bank might choose to intervene in order to 
weaken the crown," said Slovenska Sporitelna analyst Michal 
Musak.  
    The crown is trading 10.7 percent above the central parity 
within the Exchange Rate Mechanism 2 (ERM 2), which Slovakia 
entered in late November 2005 as part of its plan to adopt the 
euro in 2009. 
------------------ MARKET SNAPSHOT AT 0810 GMT ----------------- 
Crown/euro  34.350 vs 34.320 on Thursday (-0.09 pct) 
Crown/dollar   26.160 vs 26.145 (-0.06 pct) 
5-yr govt bond  yield 4.350/149 vs 4.300/137 pct 
7-yr govt bond  yield 4.351/201 vs 4.280/200 pct 
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[BRATISLAVA/Reuters/Finance.cz]