Trump does have some powerful tools that would not require approval from U.S. Congress.Politicsread more
The European Union will respond in kind if the U.S. imposes tariffs on France over digital tax plan, EU chief Donald Tusk told G-7.Technologyread more
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls Reuters FX POLL
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=EURCZK= Euro/Czech crown
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=EURHUF= Euro/forint
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=EURRON= Euro/Romanian leu
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=EURPLN= Euro/Polish zloty
* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=EURRSD= reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=EURPLN= Euro/Serbian dinar
BUDAPEST, May 6 (Reuters) - Central Europe's main currencies are expected to firm over the coming year, driven by monetary tightening in response to increased inflation, if economic risks ease in Europe, according to a Reuters poll of analysts.
One key risk mentioned by the participants of the April 29-May 3 poll is the United States imposing tariffs on car imports from Europe.
Investors are also watching the protracted process of Britain's exit from the European Union, which may cut European Union funds flowing into the region and trade with Britain.
Inflation has increased across the region in the past few months, which prompted central bank rate increases in Budapest and Prague.
But the Hungarian central bank (NBH) dropped its guidance for gradual monetary tightening in March, and the Czech bank (CNB) said on Thursday that it did not envisage a further rise in the coming year.
Both banks referred to risks in the global economy that could put a lid on inflation.
"Policy rates have nearly peaked, rate hikes (are) still more likely (in Prague) than cuts in our view," Morgan Stanley economist Pasquale Diana said in a note.
The median forecast in the poll sees the Czech crown firming 2.6 percent in the coming year relative to Friday's closing levels to 25.065 versus the euro.
The forint could gain 1.7 percent to 317.67 against the euro and the zloty 0.6 percent to 4.25.
Those rates are somewhat stronger than the levels projected in a survey a month ago.
Inflation rates from the region surprised on the upside in the past weeks, including the first figure for April in the region released by Poland a week ago.
Its annual inflation at 2.2 percent is still the lowest among the region's main economies and is in the lower half of the central bank's 1.5-3.5 percent target range.
Hungary's annual rate may even rise above the NBH's 2-4 percent target range and that may cause increasing swings in the forint's exchange rate in the short-term if the central bank does not act, some analysts said.
"We are bearish as we expect EUR/HUF edging toward the previous record at 330," said Peter Virovacz, analyst of ING in Budapest. "We see markets yet again question(ing) the NBH's credibility as inflation jumps above 4 percent."
Zoltan Varga of Equilor said the forint could regain ground after weakening in the next months as "the NBH could take some further tightening measures late in the summer or in autumn".
The CNB changed its own forecast for the crown's average rate versus the euro to 25.2 for 2020 last week from 24.8.
Erste group is working on new forecasts that would imply weaker crown levels, analyst Jiri Polansky said in a May 3 note, adding that the currency could still firm to 24.5 by the end of 2020.
"However, this development is conditional on a deal being reached between the UK and EU over Brexit and no escalation in the recent situation regarding U.S. trade policy," he said.
The strength of the U.S. dollar has kept a lid on Central European currencies in the past two years.
A separate Reuters survey of analysts found that the greenback was expected to stay strong for another three to six months before starting to cede ground to most other major currencies.
Analysts in Reuters polls have been wrongfooted for nearly two years in their predictions for a weaker dollar.
(Other stories from the global foreign exchange poll: ) (Reporting by Sandor Peto Editing by Mark Heinrich)