CEE MARKETS-Forint and zloty slip as investors eye U.S. tariffs

WARSAW, Jan 31 (Reuters) - Central European currencies eased on Friday, with the forint and zloty pulling back from recent highs, as investors awaited updates on U.S. tariffs and the dollar edged higher.

Indexes of emerging market currencies and stocks were lower on Friday, with investors bracing for a Feb. 1 deadline for U.S. tariffs as a week marked by increasing trade tensions and a slew of central bank decisions drew to a close.

"Investors may be hesitant to take new positions in the dollar due to uncertainty surrounding President Donald Trump's announcement of 25% tariffs on imports from Mexico and Canada, which would come into effect on February 1," Bank PKO BP analysts said in a note.

"Such a move would put downward pressure not only on the Mexican peso and the Canadian dollar but also indirectly, through increased risk aversion, on the EM currency basket, including the zloty."

By 1027 GMT, the Polish zloty EURPLN= slipped 0.4% to 4.2190, giving back gains from earlier this week but remaining off its nearly seven-year high of 4.1975 hit on Thursday.

PKO BP analysts said they expected the Polish currency to stabilize into the weekend, but saw the higher risk of it weakening at the start of next week.

In Hungary, the forint EURHUF= also traded 0.4% lower to the euro at 408.50, after firming to a two-month high of 406.05 on Thursday.

Data on Friday showed Hungarian producer price inflation rising further in December to 9.0% from 7.9% a month earlier in annual terms.

"This may be key for EUR/HUF, which touched new lows near 406 yesterday and bounced somehow," ING analysts said in a note.

Further cracks in the disinflationary process would be negative news for Hungary's central bank and would reduce any chance of rate cuts this year, they added.

Elsewhere, preliminary data from the Czech Republic on Friday showed the economy growing by half a percent on a quarterly basis in the fourth quarter of 2024, with domestic demand driving a modest recovery.

The expansion was the same as in the previous quarter, putting year-on-year gross domestic product growth at 1.6%, up from 1.4%. The data was exactly in line with expectations in a Reuters poll of analysts.

The Czech crown EURCZK= edged 0.1% lower to the euro, trading at 25.1360 and continuing its weakening since Tuesday.

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