WARSAW, May 24 (Reuters) - The Hungarian forint hovered
near multi-month highs on Friday, as an easing U.S. dollar gave
Central European currencies more breathing room.
    The dollar, which had pushed higher against the euro since
Monday after several weeks of losses, slipped slightly on
Friday.
    An easing dollar usually boosts investor sentiment towards
riskier assets and helps emerging market (EM) currencies.

By 0952 GMT, the forint gained 0.3% to 385.60 per
euro, nearing its highest levels since February which it hit on
Tuesday, and was on track for its fifth straight weekly gain.
    "I guess it is rather part of some kind of EM sentiment
change... Looking at the eurodollar movements, today you can see
some kind of correction after yesterday's really significant
dollar strengthening," said ING senior economist Peter Virovacz.
    "385 could be kind of a strong floor to go through ... A lot
depends, I guess, on today's U.S. data, especially the Michigan
sentiment indicator," he said.
    Virovacz added that a further increase in U.S. inflation
expectations would likely have markets focus on the hawkish
Federal Reserve narrative, strengthening the dollar and possibly
turning back the forint.
    On Tuesday, Hungary's central bank cut borrowing costs, but
signalled that scope for more easing would be "very, very
limited" amid strong service sector repricing and other risks.
    A Budapest-based trader said that in recent days the forint
had seen a technical correction after several failed attempts to
firm past 385.
    "Even though the market got entirely what it expected
regarding the size of the rate cut and the communication from
the central bank, there were some stop-loss deals and positions
being closed, which sent the forint to weaker levels," the
trader said.
    "Forint buyers returned at levels above 387.... We are back
in the 385-390 range," the trader said, adding that Hungary's
high interest rates continued to support the forint.
    The Polish zloty was steady against the euro at
4.2640, hanging off of the Feb. 2020 high of 4.25 which it
touched on Monday.
    "The level of 4.25 remains a strong psychological resistance
for the EUR/PLN exchange rate and needs new impulses for a
further decline," Bank Millennium wrote in a note.
    On the equities front in Warsaw, discount retailer Pepco
 shares surged over 15% after first half earnings
smashed estimates.
    Meanwhile the Czech crown also held steady at
24.72 per euro, heading towards ending a five-week firming
streak, but settling off a four-month high hit last week.
    
    
           CEE MARKETS                                         
           SNAPSHOT AT                                 
           1152 CET                                    
                          CURRENC                              
                          IES                          
                          Latest   Previous   Daily    Change
                          bid      close      change   in 2024
                                                       
 Czech                    24.7200    24.7320   +0.05%    -0.07%
 crown                                                 
 Hungary                  385.600   386.7000   +0.29%    -0.63%
 forint                         0                      
 Polish                    4.2640     4.2620   -0.05%    +1.89%
 zloty                                                 
 Romanian                  4.9745     4.9750   +0.01%    -0.00%
 leu                                                   
           Note: daily                                         
           change                                      
           calculated                                  
           from 1800 CET                               
                                                               
                          Latest   Previous   Daily    Change
                                   close      change   in 2024
                                                       
 Prague                   1561.94  1571.1700   -0.59%   +10.46%
 Budapest                 69262.9   68319.51   +1.38%   +14.26%
                                2                      
 Warsaw                   2526.63    2541.37   -0.58%    +7.84%
 Buchares                 17463.1   17435.31   +0.16%   +13.61%
 t                              3                      
                                                               
                                              Spread   Daily
                                              vs Bund  change
                                                       in
                                                       spread
                                                       
 Czech                                                 
 Republic                                              
 2-year                    4.1240     0.0220  +105bps     +4bps
 5-year                    4.1510     0.0390  +151bps     +7bps
 10-year                   4.2850     0.0510  +171bps     +8bps
 Poland                                                        
 2-year                    5.3840    -0.0110  +231bps     +0bps
 5-year                    5.6370     0.0370  +300bps     +6bps
 10-year                   5.7950     0.0610  +322bps     +9bps
 
 (Reporting by Karol Badohal in Warsaw, Gergely Szakacs in
Budapest; Editing by Varun H K)