CEE MARKETS-Crown holds on to gains supported by expectations of more hawkish rate path

By Anita Komuves BUDAPEST, May 3 (Reuters) - The Czech crown edged down but kept trading near a 12-week-high on Friday, a level it reached in the previous session after the Czech National Bank delivered its third 50 basis point interest rate cut and lifted its assumed interest rate path. The crown was trading at 25.017 versus the euro at 0824 GMT. "The Czech koruna rallied sharply yesterday after the National Bank's (CNB's) press conference unveiled a hawkish set of macroeconomic forecast revisions, even though the inflation forecast in particular was lowered," Commerzbank wrote. "Such an official forecast obviously supports the currency by signalling a more hawkish interest rate path than was previously implied," they added. The CNB sharply lifted the assumed market interest rate path in an updated outlook on Thursday, while also forecasting stronger growth in 2024 and softer inflation than previously expected. With the timing of the first Federal Reserve rate cut pushed back by strong U.S. data, risks from higher fuel prices, weaker exchange rates, persistently strong services inflation and the prospect of the region's economic recovery gaining traction, central bankers in the CEE region have grown cautious about cutting rates further. In Hungary, Central Bank Deputy Governor Barnabas Virag all but ruled out rate cuts in the second after the bank lowered its base rate by just 50 bps last week, the smallest step in an easing cycle launched a year ago. Hungary's forint slid 0.09% on the day and was trading at 389.55 versus the euro after it firmed below 390 for the first time in three weeks in the previous session, helped by a weakening of the zloty. The crown and the forint are each more than 1% down versus the euro since the start of the year. A Reuters poll showed on Friday that central European currencies were likely to stay under pressure in the second half of the year amid further interest rate cuts in some parts of the region and later or more gradual easing by global central banks. Prague's stock index was 1.41% lower as Komercni Banka's shares were down 9% after going ex-dividend and posting a lower than expected first-quarter net profit. Markets were closed for a national holiday in Poland and Romania. CEE SNAPSH AT MARKETS OT 1024 CET CURREN CIES Latest Previo Daily Change us trade close change in 2024 Czech 0 0 Hungary 00 00 Polish % % Serbian 00 00 % % Note: calculated from 1800 daily CET change Latest Previo Daily Change us close change in 2024 Prague 1533.5 1555.4 -1.41% +8.45 2 400 % Budapes 68086. 68123. -0.06% +12.3 t 12 99 2% Spread Daily vs change Bund in Czech spread Republi c 0 ps 0 ps 0 ps Poland 0 ps 0 ps 0 ps FORWARD 3x6 6x9 9x12 3M interb ank Czech 4.78 4.49 4.25 5.52 Rep Hungary 7.15 6.98 6.85 7.48 Poland 5.82 5.71 5.49 5.86 Note: are for ask FRA prices quotes ***************************************** ********************* (Additional reporting by Jan Lopatka in Prague; Editing by Ros Russell)