CEE MARKETS-Zloty and forint pare gains from improved geopolitical risk sentiment

WARSAW, Feb 19 (Reuters) - The Polish zloty hovered around a seven-year high on Wednesday and Hungary's forint close to a major psychological level on improved risk appetite, as U.S. President Donald Trump's Ukraine envoy arrived in Kyiv to meet President Volodymyr Zelenskiy.

Trump's administration said on Tuesday it had agreed to hold more talks with Russia on ending the war in Ukraine after an initial meeting that excluded Kyiv.

The "decrease in geopolitical tensions in the region and strong growth on domestic stock exchanges may be attracting capital from across the ocean and thus supporting the (Polish) zloty," Poland's state development bank BGK analysts wrote in a note.

"The (zloty) will probably remain strong, but the bar for continued appreciation is set high."

By 1000 GMT the zloty EURPLN= had eased 0.1% against the euro to 4.1595, after hitting its strongest level since February 2018 on Tuesday at 4.1485.

Warsaw stocks also retreated a bit with some profit-taking although the blue-chip index .WIG20 has led gains in central Europe this year, growing over 21% so far.

The forint EURHUF= shed 0.2% in morning trade to 401.50 per euro, after firming to 400.60 in the previous session, its strongest in four months. It has run into its 200-day moving average at 400.5 that should act as the euro-forint pair's support for the time being, according to Equilor analysts.

"If that is broken, we can watch the next support levels at 400, then between 398-399, while the resistance level is at 405," they wrote in a note.

The forint has not firmed past the psychological 400 per euro level since last October.

Better global risk sentiment in recent weeks has been a main driver for the forint's rise, with the euro - central Europe's main reference currency - firming recently against the dollar.

In the Czech Republic, the less-volatile crown EURCZK= eased 0.1% against the euro to 25.1120, pulling back for a third day from a seven-week high near the psychological 25 per euro level that was hit last week.

Some investors took the move to book profits, traders said.

Analysts expect the crown to hover near current levels as it waits for fresh cues from global markets, with eyes on U.S. tariff uncertainties as well as Ukraine talks.

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