HVB ANALYSTS EXPECT WEAKENING OF USD

ZAGREB, July 3 (Hina) - Analysts from the HVB Group estimate that in the next six months of this year, the US dollar is expected to continue weakening in relation to the euro. It may even go as low as 1.05 for 1 euro, Dr. Peter Harold, the director of the Capital Markets Bank Austria Creditanstalt Group (BAC) and procurist of Splitska banka said on Wednesday. #L# Harold explained that the economy in the USA compared to the economies in the Euro zone, is marked with huge deficits in current accounts and the falling share market and slower inflow of capital had created a heavy burden for the American dollar. Along with crises in large companies and the general opinion that stocks are overpriced, more time is needed for the situation to become more stable. It is clear however, that the current trend of the decrease in the value of the dollar cannot be maintained, Harold believes, adding that BAC analysts therefore foresee that the US market will recover in 12 months when the euro should be equivalent to about 0.98 cents. Croatia, Slovenia and Hungary in contrast to other countries in the region, did not have any significant reaction to the weakening of the dollar on the markets in transitional countries. Now is the right time to invest in low risk markets, the head of the HVB Group's revenue investigation sector for countries of central and eastern Europe, Martin Blum said. Blum added that despite the current political crisis in Croatia, the recommendation for the purchase of Croatian bonds is still applicable when nominated in euros due to the good and significant macro-economic indicators, with a warning to investors to hold out for a few more days. Economic analyst with the HVB Group, Goran Saravanja, believes that the kuna will strengthen over the summer period to about 7.43 for 1 euro. Saravanja added that he believed the kuna was not over- rated. (hina) sp sb