CEE MARKETS-Stocks, FX gain in market relief as Trump cools Fed comments

BUDAPEST, April 23 (Reuters) - Central European currencies edged up while stocks gained as they tracked European peers that rebounded after investors drew some relief from comments by U.S. President Donald Trump on the chairman of the Federal Reserve and China.

Trump walked back his threats to dismiss Fed Chair Jerome Powell on Tuesday and also reiterated he wanted to reach a deal with China where tariffs would not be anywhere near 145%.

Warsaw's equities .WIG20 led stock gains in central Europe as they added 1.9% while Prague .PX was up 1.2%. Budapest's .BUX blue chip index firmed 0.9%

The Polish zloty EURPLN= was mostly stable, trading at 4.2885 to the euro by 0834 GMT, staying within its recent range.

Polish retail sales in constant prices were down 0.3% year-on-year, below expectations, data showed on Wednesday.

"Let us recall that the disappointing reading of retail sales for February was one of the arguments for changing the narrative of the Monetary Policy Council," ING wrote in a note.

"However, it is difficult to expect that today's potentially disappointing reading could intensify expectations for interest rate cuts. In our opinion, they have already become too aggressive," they said.

Earlier this month, Poland's central bank governor Adam Glapinski said interest rates could be cut as soon as May if incoming economic data supported the easing of inflation pressures. Borrowing costs in Poland have remained unchanged since October 2023.

The Czech crown EURCZK= firmed, up 0.2% and trading at 25.053 versus the euro as it pushed closer to the 25 per euro psychological level that it fell past in the tariff-induced market turmoil seen this month.

"Calmer global stock markets can play into the crown's hands, along with cautious rhetoric from the central bank," CSOB bank said, referring to comments from Czech central bank Vice-Governor Jan Frait on Tuesday who said caution in policy easing was still needed.

On debt markets, the Czech Finance Ministry will offer three bonds at an auction on Wednesday.

"While the last auction wasn't as strong as those before, we’re cautiously bullish on today’s auction. Not only do we see some domestic demand gain traction but the global sentiment has improved, too," said Komercni Banka trader Marek Lesko.

Elsewhere, the Hungarian forint EURHUF= was a touch stronger, up 0.1% and was trading at 408.3 versus the euro, near the level where it stabilised at the end of last week.

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