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)