Slovak crown stronger, seen testing firmer levels

    The Slovak crown hovered in 
sight of seven-week highs against the euro in early trade on 
Wednesday with dealers expecting it to test even stronger levels 
in the coming days amid positive regional sentiment. 
    The crown traded at 34.285 to the euro  as of 0840 
GMT, from 34.330 late on Tuesday and 0.2 percent down from a 
seven-week high of 34.210 per euro hit in the previous session. 
    The crown rose to hit its strongest levels since December 28 
on Tuesday, driven by a central bank decision to accept all bids 
in its liquidity draining repo tender, but failed to build on 
gains as investors took quick profits. 
    "The crown is stable," one Bratislava-based dealer said. 
"The crown might test lower (firmer) levels, as yesterday's repo 
tender might be seen as a signal that the central bank will let 
the unit move to 34.0 per euro." 
    The NBS rejected bids in the repo tender to leave the market 
flooded with excess funds at the beginning of the year to stem 
the crown, which hit a record of 34.05 per euro in December, a 
level where directly intervened on the market. 
    The Slovak currency is trading 10.9 percent above its parity 
rate in the exchange rate mechanism ERM-2, which Slovaks entered 
in November 2005 as part of its strategy to adopt the euro in 
2009. 
------------------ MARKET SNAPSHOT AT 0840 GMT ----------------- 
Crown/euro  34.285 vs 34.330 on Tuesday (+0.15)  
Crown/dollar   26.065 vs 26.125 (+0.33) 
5-yr govt bond  yield 4.300/4.150 vs 4.300/3.184 pct 
7-yr govt bond  yield 4.317/4.184 vs 4.270/4.136 pct 
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[BRATISLAVA/Reuters/Finance.cz]