CEE MARKETS-Zloty, forint ease as investors focus on Ukraine and tariffs

By Anita Komuves

BUDAPEST, March 3 (Reuters) - Most central European currencies eased on Monday as developments regarding talks aimed at ending the war in Ukraine and U.S. President Donald Trump's tariff threats dominated investors' attention.

The Polish zloty fell 0.7% versus the euro to 4.183 EURPLN= as it retreated from a 10-year peak of 4.1270 hit last Thursday.

The Hungarian forint eased 0.3% to 401.4 per euro EURHUF=, trading on the weaker side of the psychological 400 level as it also gave up gains from last week.

Both currencies were back at levels seen when local markets closed on Friday before an acrimonious meeting between the presidents of Ukraine and the U.S. caused sharp weakening in out-of-market trading hours.

"Friday's move was significant, and today we should see more of a stabilisation at weaker levels while waiting for further developments in the Ukrainian negotiations," ING wrote in a note.

"What is clear, though, is that it will be more of a bumpy road for FX from this point onwards. However, hawkish central banks should provide some support to weakening FX and limit larger moves," ING added.

Trump and Ukrainian President Volodymyr Zelenskiy clashed in a meeting at the Oval Office on Friday, prompting a plunge in central European currencies in after-hours trade.

Polish state-owned development bank BGK said that after Friday's weakening they expect the zloty's rate to "stabilize near current levels."

"Impulses regarding events on the US-Ukraine line should give way to signals from the global economic situation and US customs policy," they said.

Last week Trump pledged 25% tariffs on shipments from the European Union, something that would hit central Europe's more export-driven economies.

Trump's tariff proposal on EU imports is likely to dent growth prospects in Central Europe, compounding existing fiscal challenges, S&P Global Ratings told Reuters.

Elsewhere, the Czech crown was little changed at 25.05 per euro EURCZK=.

Stock markets in the region were mixed, with Warsaw .WIG20 easing 0.9% while Prague .PX added 0.7%. Budapest was up .BUX 0.1%.

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