CEE MARKETS-Polish retail sales add to zloty support, forint hovers around highs

WARSAW, Feb 23 (Reuters) - Central Eastern European currencies edged higher on Monday, with the zloty boosted by higher-than-expected retail sales data in Poland, while trade war risks and tensions between the U.S. and Iran were offset by a softer dollar.

Uncertainty over U.S. trade policy, after President Donald Trump announced a blanket 15% import levy, kept the dollar under pressure, helping risk appetite for emerging market assets in central Europe and elsewhere.

Iran and the U.S. are set to hold a third round of nuclear talks on Thursday in Geneva, amid growing concerns about the risk of military conflict between the long-time adversaries.

In Poland, data on Monday showed retail sales rose 4.4% on the year in January, beating analyst expectations of a 3.1% reading.

"Regarding the zloty, we're actually off to a good start today. This is certainly supported by ... better-than-expected retail sales data," ING Bank Slaski Senior Economist Mateusz Sutowicz said, adding that tailwinds were coming from the firming eurodollar.

FORINT HOVERS AROUND TWO-YEAR HIGH BEFORE RATE MEETING

Sutowicz said the rise in the zloty wasn't particularly strong and the Polish currency was set to stay in the 4.21-4.23 range, with odds pointing at the weaker end.

"I would point to 4.23, in the sense that geopolitical events, tariff confusion, the issue of a possible attack on Iran, these will be events that, in my opinion, should hinder risk appetite."

At 0939 GMT, the zloty EURPLN= was up 0.2% against the euro at 4.2160, recovering losses from the last two sessions.

In Hungary, attention was focused on Tuesday's interest rate decision from the National Bank of Hungary. A majority of analysts in a Reuters poll forecast a restart to easing with a 25-basis-point cut in its base and more likely to follow ahead of an April parliamentary election.

The forint EURHUF= firmed 0.1% to 379.80.

"The market is fully pricing in the rate cut in February and March, so we do not expect significant damage (to the forint) unless the NBH surprises with dovish guidance," ING analysts wrote in a note.

"Still, EUR/HUF tested 378 again last week, a two-year low, and the rate cut will push the pair higher. Meanwhile, the market has repeatedly shown a willingness to use any higher levels for new forint longs."

Elsewhere, the Czech crown EURCZK= was steady at 24.2190, while the Romanian leu EURRON= was also flat at 5.0977.

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