CEE MARKETS-Currencies steady as markets eye Trump's steps on Ukraine

By Anita Komuves

BUDAPEST, Feb 20 (Reuters) - Central European currencies treaded water on Thursday, with the forint and the zloty both hovering near recent highs, as investors focussed on U.S. President Donald Trump's next steps on the Ukraine-Russia war.

The Hungarian forint EURHUF= was unchanged, trading at 402.7 after easing in the previous session in a correction, turning back from 400.6, near its 200-day moving average where it firmed on Tuesday.

"This is just a small correction, there is no turnaround in the trends. The firming really slowed down around 401 and it is obvious that the rate needs a new trigger to strengthen further," an FX trader in Budapest said.

Currencies and stocks in the region were boosted by a risk-on market mood after President Donald Trump announced last week that he had held a call with Russian President Vladimir Putin on possible talks on the war in Ukraine. U.S. and Russian officials met on Tuesday to discuss the topic.

A ceasefire or peace deal to end the war between Ukraine and Russia would be "net positive" for the currencies of nearby emerging economies, although much of that boost may already be factored in, investment bank JPMorgan said on Wednesday.

It added that outside Ukraine, Hungary and Turkey's currencies could be the biggest beneficiary if a ceasefire deal helps brings down European gas prices by allowing Russian gas to be bought more freely again.

The Polish EURPLN= edged up 0.1% to trade at 4.172 per euro, following a weakening in the previous session when it pulled back from its strongest level since February 2018 that it hit on Tuesday at 4.1485.

Besides technical reasons for the weakening, the lack of consistent declarations after Tuesday's U.S- Russia talks and the exclusion of European partners from the negotiating table caused disappointment in the markets, PKO Bank said in a note.

This "translated into increased risk aversion and weakening of the currencies of countries near the frontline, including the złoty," it said.

Elsewhere, the Czech crown EURCZK= slid 0.05% and traded at 25.11 to the euro.

Stocks gave up some of their recent gains, with Budapest .BUX leading losses as it shed 0.7%. Warsaw .WIG20 was 0.3% lower while Prague .PX slid 0.4%

For related news and prices, click on the codes in brackets:
All emerging market news EMRG CEEU CEE/
Spot FX rates
Eastern Europe spot FX EEFX=  Middle East spot FX MEFX=
Asia spot FX ASIAFX=          Latin America spot FX LATAMFX=
Other news and reports
World central bank news CEN Economic Data Guide ECONGUIDE
Official rates GLOBAL/INT   Emerging Diary EMRG/DIARY
Top events M/DIARY  Diaries DIARY Diaries Index IND/DIARY