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CEE MARKETS-Forint touches one-year low vs zloty, politics weigh

* Hungary's friction with Brussels weighs on forint

* Forint weakness unlikely to make Hungarian cbank less dovish

* Zloty may firm after France's first-round elections -dealers

* Bucharest stocks retreat from 9-year highs

BUDAPEST/WARSAW, April 19 (Reuters) - The forint rebounded from a one-year low against the zloty on Wednesday due to technical factors but could slump again given Hungary's loose monetary policy and fresh political uncertainty, dealers said. Geopolitical risks including France's upcoming elections have weighed on both currencies in the past weeks. On Wednesday they moved in opposite directions versus the euro. The Hungarian unit firmed and the zloty eased 0.1 percent against the euro. The forint rebounded versus the zloty after piercing the key 74 level against the Polish currency. Forint-zloty cross trade is normally one of the most liquid among Central European currencies. The forint traded at 73.79 against the zloty, but dealers said it may soon slide again past 74.15 towards its weakest levels since 2015. The zloty has outperformed the forint since late 2016 when worries eased that Poland's nationalist government would stick with unfriendly policies towards foreign businesses and trigger a deterioration in the country's credit ratings. The forint's relative attractiveness has suffered from lower than expected March inflation figures - signaling dovish monetary policies. Another dampening factor has been friction between Budapest and the European Commission and Germany over a law targeting the Central European University, founded by financier George Soros. The new legislation by Prime Minister Viktor Orban's nationalist government touched off a wave of protests in Budapest over an alleged maneuver to silence critical expression. "Currencies react more sensitively to such things than bonds as turnover in both the forint and the zloty (spot foreign currency markets) has declined," one Budapest-based dealer said. The forint, trading at 313 against the euro, was off four-month lows touched at 314.36 early this week, but this is unlikely to make the Hungarian central bank, which will meet on Tuesday, less dovish, dealers said. Hungarian government bond yields dropped 2-3 basis points and traded near multi-month lows, just like slightly higher Polish 10- and 5-year yields. "We think that the data published this week in Poland (especially today's labor market data) will stop the decline in yields on the short end or cause yield to rise slightly," ING analysts said in a note. "Demand for bonds in the 5+ years segment will likely remain strong due to the strong Bund(s)." ING analysts added that the zloty, which was trading at 4.24 against the euro, could strengthen through 4.2 next week if Sunday's first-round French presidential elections reduce political risks. Investors have been concerned that the far-right or far-left candidate - both anti-EU and anti-euro - might make France's decisive second round on May 7. Regional stock indices mostly rose slightly, except for Bucharest which gave up some ground after hitting a 9-year high on Tuesday.

CEE SNAPS AT 1053 MARKETS HOT CET

CURRENCIES Lates Previ Daily Chang

t ous e bid close chang in e 2017 Czech crown 26.80 26.79 -0.01 0.77% 00 60 % Hungary 313.0 313.4 +0.1 -1.34 forint 000 400 4% % Polish 4.240 4.236 -0.08 3.86% zloty 2 6 % Romanian 4.528 4.524 -0.09 0.15% leu 3 3 % Croatian 7.454 7.432 -0.29 1.36% kuna 0 5 % Serbian 123.5 123.5 +0.0 -0.15 dinar 300 850 4% %

Note: daily calculate previ close 1800

change d from ous at CET

STOCK S Lates Previ Daily Chang

t ous e

close chang in

e 2017 Prague 970.6 968.0 +0.2 +5.3 4 6 7% 2% Budapest 32681 32521 +0.4 +2.1 .43 .58 9% 2% Warsaw 2251. 2237. +0.6 +15. 77 36 4% 60% Bucharest 8187. 8232. -0.55 +15. 02 65 % 55% Ljubljana 772.7 778.1 -0.69 +7.6 7 6 % 9% Zagreb 1953. 1944. +0.4 -2.05 93 72 7% % Belgrade <.BELEX15 725.5 726.6 -0.16 +1.1 > 2 9 % 4% Sofia 657.8 652.8 +0.7 +12. 0 9 5% 17%

BONDS Yield Yield Sprea Daily d

(bid) chang vs chang e Bund e in Czech sprea Republic d 2-year <CZ2YT=RR -0.04 0.04 +078 +1bp 5 bps s 5-year <CZ5YT=RR 0.234 -0.00 +074 -2bps > 2 bps 10-year <CZ10YT=R 0.992 -0.08 +081 -9bps R> 3 bps

Poland

2-year <PL2YT=RR 2.003 0.008 +283 -2bps > bps 5-year <PL5YT=RR 2.84 0.018 +335 +1bp > bps s 10-year <PL10YT=R 3.368 -0.01 +319 -2bps R> 2 bps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

inter bank

Czech Rep < 0.3 0.31 0.37 0

PRIBOR=>

Hungary < 0.21 0.28 0.35 0.16

BUBOR=>

Poland < 1.746 1.757 1.792 1.73

WIBOR=>

Note: FRA are for quotes ask

prices

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(Editing by Mark Heinrich)