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CEE MARKETS-Leu touches 4-year low, CEE units fall on hawkish Fed

* Dollar rebound, profit-taking, politics weaken currencies

* Romanian leu at 4-yr low amid fresh political uncertainty

* Markets shrug off Czech PM giving up party leadership

(Adds currency sell-off against dollar, fresh dealer and analyst quotes) BUDAPEST, June 15 (Reuters) - Central European currencies eased on Thursday due to selling against the dollar after hawkish comments from the Fed, profit-taking and political turbulence in Bucharest and Prague. "The weakening is caused by selling against the dollar, because the Fed projected further rate hikes yesterday," one Budapest-based dealer said. "This pulls them (regional currencies) down against the euro as well." In global markets, the U.S. Federal Reserve's interest rate hike and guidance for more to come helped the dollar rebound following a drop prompted by an unexpected slowing of U.S. inflation and retail sales in May. Dollar buying often weakens currencies in emerging markets, including the European Union's eastern members. The zloty led the fall in illiquid international trade as domestic markets were closed due to a national holiday in Poland. It shed 0.75 percent by 1309 GMT, to trade at 4-week lows at 4.225. The forint weakened by 0.7 percent. The zloty is still near 2-year highs and the forint close to 8-month highs. Regional currencies and stocks are mostly supported by robust growth and stability. Budapest's main index led a fall triggered by risk aversion on Thursday. It fell 0.9 percent, retreating from Wednesday's record highs. The Czech crown shed a quarter of percent. Trading at 26.233, it is still near its strongest levels since late 2013, touched on Wednesday. It is buoyed by a robust economy and expectations for central bank rate hikes later this year or next. Investors in the Czech Republic usually shrug off domestic political news, like Prime Minister Bohuslav Sobotka's announcement on Wednesday that he would step down as the leader of his Social Democrat party. Romania's ruling Social Democrats, meanwhile, withdrew their support from their own government late on Wednesday, leading to political turmoil. President Klaus Iohannis urged the ruling party to resolve the crisis with a no-confidence vote in parliament if Prime Minister Sorin Grindeanu is unwilling to resign. The leu's reaction was muted, declining just 0.2 percent to 4.5895, off a four-year low touched at 4.592. It was underperforming in the region even before the latest political turmoil. It has been under pressure over concerns that the leftist government's wage hikes and tax cuts could boost the budget deficit and stoke inflation by next year. "Further (currency) appreciation is rather unlikely in the coming months in our CEE universe, apart from the Czech Republic, where monetary tightening could add to the strength of the koruna," Erste analysts said in a note. "The other end of the spectrum is Romania, where fiscal woes could weigh on the currency in the coming quarters," they added.

CEE MARKETS SNAPSH AT 1509 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 26.233 26.147 -0.33% 2.95% 0 0 Hungary 307.80 305.67 -0.69% 0.33% forint 00 50 Polish zloty 4.2245 4.1929 -0.75% 4.25% Romanian leu 4.5895 4.5808 -0.19% -1.19% Croatian kuna 7.3980 7.4005 +0.03 2.12%

%

Serbian dinar 122.03 122.15 +0.10 1.08% 00 00 % Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 997.09 1000.1 -0.31% +8.19 5 % Budapest 35652. 35985. -0.93% +11.4 19 82 0% Bucharest 8415.7 8477.1 -0.72% +18.7 7 2 8% Ljubljana 786.18 788.60 -0.31% +9.56

%

Zagreb 1855.8 1854.5 +0.07 -6.97% 4 9 % Belgrade 718.61 719.91 -0.18% +0.17

%

Sofia 683.72 681.81 +0.28 +16.5 % 9%

BONDS

Yield Yield Spread Daily (bid) change vs change Bund in Czech spread

Republic

2-year -0.082 -0.034 +056b -9bps

ps

5-year -0.039 0.056 +035b -2bps

ps

10-year 0.86 0.077 +057b +2bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 0.34 0.41 0.5 0

IBOR=>

Hungary <BU 0.19 0.23 0.28 0.15

BOR=>

Poland <WI 1.765 1.78 1.81 1.73

BOR=>

Note: FRA are for ask quotes prices ********************************************************** ****

(Additional reporting by Jason Hovet in Prague; Editing by Gareth Jones and Pritha Sarkar)