CEE MARKETS-Currencies hold onto gains after US dollar volatility

PRAGUE, July 17 (Reuters) - Central European currencies edged up on Thursday, holding on to stronger levels after U.S. dollar turbulence, as Hungary's forint firmed past the psychologically key 400 a euro level and the Czech crown hovered just off one-year highs.

Stock markets in central Europe were mostly higher while currencies held on to most of the gains from late Wednesday after reports of the possible dismissal of Federal Reserve Chair Jerome Powell battered the dollar.

U.S President Donald Trump was quick to deny the reports, restoring some calm to volatile markets, but kept the door open to the possibility and renewed his criticism of the central bank chief for not lowering interest rates.

By 0827 GMT on Thursday, central European currencies had mostly come off Wednesday highs but were still firmer on the day.

The forint EURHUF= traded up 0.05% at 399.45 to the euro, with markets already looking ahead to next week's central bank meeting, when interest rates are likely to stay on hold.

Earlier this month, the central bank's Deputy Governor Zoltan Kurali told Reuters that the bank would need to see faster and more durable disinflation to consider any easing in monetary conditions, and rate cuts were off the table as long as inflation exceeded the bank's tolerance band.

A slowdown in wage growth, according to data this week, does not change the overall picture for the National Bank of Hungary.

"While there have been many market calls at 390-395 levels, we remain in a more neutral camp at current levels around 400 EUR/HUF," ING said in a note. "The market has priced out most of the rate cuts and we can't see more support from this side in our view."

Markets also see little chance of a Czech interest rate cut at the central bank's next meeting in early August.

The crown EURCZK= has touched more than one-year highs in July, just beyond 24.60 a euro and was 0.1% stronger at 24.635 on Thursday.

In Poland, the zloty EURPLN= also gained 0.05% to 4.2545 a euro, at the stronger end of the range it has traded within in recent months.

With a quiet calendar for domestic data, markets will take cues from global core markets, analysts said.

"Investors are awaiting the end of July, when preliminary (Polish) inflation data from the domestic economy will be released. This will provide the basis for intensifying bets on the expected scale of interest rate cuts by the Monetary Policy Council in September," ING said.