PRAGUE, Oct 17 (Reuters) - Poland's zloty led losses in

central Europe on Thursday, retreating close to two-month lows

it hit earlier this month, as a firmer dollar continued to drag

on the region ahead of an expected European Central Bank

interest rate cut.

The ECB is likely to lower interest rates for a third time

this year later in the day. At the same time, central banks in

Hungary and the Czech Republic are showing more caution in

easing campaigns started last year.

Expectations of a cut by the ECB have been a support factor

for central Europe's currencies as lower euro zone rates create

a more advantageous rate differential for the region.

But the dollar on Thursday also touched a multi-week high,

on the back of a potential Donald Trump win at the upcoming U.S.

election. That move cut into the risk appetite and put a drag on

central Europe.

"The biggest issue here is the support, at least in polls,

for Donald Trump," said Piotr Poplawski, senior economist at

ING.

"This is something quite negative for emerging market

currencies and the market started pricing in the whole Trump

trade scenario. In this scenario we have the (United States)

looking more isolationist."

The zloty bore the brunt, losing 0.5% to 4.32 to

the euro and returning to the weak side of the psychological

level of 4.30 after recent firming.

In Hungary, the forint steadied at 401.60 to the

euro.

"The commentary from the ECB will be the key thing to watch

later today, that can give some direction to the market," an FX

trader in Budapest said.

Markets were also watching an economic conference in

Budapest where Deputy Central Bank Governor Barnabas Virag is

due to speak, only days before a central bank rate meeting

scheduled for Oct. 22.

Virag last week flagged a likely pause in the easing of the

bank's main interest rate - which remains the European Union's

highest alongside Romania's - after an escalation of the

conflict in the Middle East and a shift in the U.S. rate outlook

pushed the forint to 18-month lows beyond the big 400 per euro

level.

The Czech crown was also treading water at softer

levels after weakening this month, as it inched up 0.1% to

25.268 to the euro. Romania's leu was a tad stronger

at 4.974 to the euro.

CEE SNAPSHOT AT

MARKETS 1138

CET

CURRENCIES

Latest Previo Daily Change

us

trade close change in 2024

Czech 0

Hungary 00

Polish Romania Serbian 00

Note: calcula 1800 CET

daily ted

change from

Latest Previo Daily Change

us

close change in 2024

Prague 1616.82 1612.5 +0.27% +14.34

200 %

Budapes 75212.10 75170. +0.06% +24.07

t 39 %

Warsaw 0

Buchare 17464.76 17485. -0.12% +13.62

st 07 %

Spread Daily

vs Bund change

in

Czech spread

Republi

c

Poland

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AGREEMENTS

3x6 6x9 9x12 3M

interba

nk

Czech Hungary Poland Note: are for

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