Slovak crown regains ground, but sentiment shaky

    The Slovak crown rebounded 
from two-week lows against the euro on Wednesday as the market 
calmed down after a regional sell-off in the previous session, 
but dealers said the unit's direction was hazy in the short run. 
    The crown fell as far as 34.600 per euro in early off-shore 
trade, but recovered to 34.500  as of 1520 GMT, 
compared with 34.445 late on Tuesday. 
    "The crown now tracks external flows," one Bratislava-based 
dealer said.  
    "Investors wait to see whether the fall of U.S. stocks 
continues. The sentiment is rather negative and we could return 
towards levels of around 34.600 per euro," he said. 
    The crown did not react to the release of January EU-norm 
inflation data, which showed annual consumer price growth eased 
to 2.2 percent from 3.7 percent in December, in line with 
forecasts. 
    On Tuesday, the central bank (NBS) kept the key two-week 
repo rate at 4.75 percent for the fifth month in a row, which 
failed to give a firming impetus to the crown. 
    The NBS is widely expected to start easing its policy in the 
second half of the year, when it is sure to fulfil the inflation 
criterion for euro adoption, which Slovakia aims to adopt in 
2009. 
------------------ MARKET SNAPSHOT AT 1520 GMT ----------------- 
Crown/euro  at 34.500 vs 34.445 on Tuesday 
Crown/dollar   26.086 vs 26.015 
5-yr govt bond  yield 4.275/4.172 vs 4.272/4.145 pct 
7-yr govt bond  yield 4.263/4.180 vs 4.300/4.200 pct 
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[BRATISLAVA/Reuters/Finance.cz]