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UPDATE 1-CEE MARKETS-Currencies firm as ECB less dovish than expected

Sandor Peto

* Currencies trade at or near multi-week highs vs the euro

* ECB pushed back timing of hike, less dovish than seen-traders

* Hungarian bond yields fall, await inflation data

* Serbian central bank keeps rates on hold as expected

(Recasts with ECB, Serbian central bank meeting, Hungarian bond auction) BUDAPEST, June 6 (Reuters) - Central European currencies firmed modestly on Thursday after the European Central Bank sounded less dovish than expected even though it pushed back the timing of its first post-crisis interest rate hike. Dollar selling on bets the U.S. Federal Reserve's next interest rate move will be a cut lifted the region's currencies earlier this week. The dollar continued to weaken against a basket of currencies on Thursday, but investors in Central European currencies switched focus to track the euro instead, which rose to a seven-week high versus the greenback. While the ECB put off rate hikes it also did not hint at an interest rate cut, sending the euro higher and CEE currencies in its wake. Central Europe's main currencies were slightly firmer against the euro at or near multi-week highs. The Romanian leu set a new 4-and-1/2-month high but then retreated to 4.722 by 1443 GMT, steady from Wednesday. The ECB said its interest rates could stay at their current record-low level through the first half of 2020, but the change in the ECB's guidance had been priced into the region's markets, dealers said. "Overall, the ECB's comments were less dovish than expected," one Budapest-based fixed income trader said. "Looking ahead, lots of uncertainties remain, including (Hungarian) inflation figures tomorrow, the G20 meeting (in late June) and (U.S. President Donald) Trump's trade war," the trader said. Government bonds were jittery around the ECB meeting, reflecting swings in Bunds. Still, Hungary's morning auction drew strong demand and led to a decline in yields on the day, and a flattening of their curve, traders said. The 10-year paper traded at 2.87% late in the session, up from its 2.83% fixing but still down 3 basis points from Wednesday. Elsewhere, the dinar firmed 0.1% to 117.76 against the euro. The Serbian central bank kept the region's highest benchmark rate on hold at 3% at a policy meeting as the dinar had remained strong, growth stable and inflation within the bank's target range. Regional equities were mixed and mostly rangebound except for Warsaw where the bluechip index gained 1.75%. Its main driver was PKO BP bank, with a more than 5% rise to a four-and-1/2-month high. The bank said earlier this week that it planned to increase its return-on-equity to 11 percent this year from 10 percent in 2018, Polish news agency PAP reported.

CEE SNAPSHOT ATMARKETS 1643 CET

CURRENCI ES

Latest Previous Daily Changebid close change in 2019Czech <EURCZK= 25.6260 25.6550 +0.11% +0.32%crown >Hungary <EURHUF= 320.9500 321.3000 +0.11% +0.04%forint >Polish <EURPLN= 4.2751 4.2764 +0.03% +0.34%zloty >Romanian <EURRON= 4.7220 4.7220 +0.00% -1.44%leu >Croatian <EURHRK= 7.4230 7.4140 -0.12% -0.18%kuna >Serbian <EURRSD= 117.7600 117.8600 +0.08% +0.46%dinar >Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 1048.39 1052.680 -0.41% +6.27%

0

Budapest 40954.43 41073.62 -0.29% +4.64%Warsaw 2262.12 2223.27 +1.75% -0.64%Bucharest 8618.06 8615.37 +0.03% +16.72%Ljubljana <.SBITOP 882.04 881.34 +0.08% +9.67%>Zagreb 1864.62 1858.73 +0.32% +6.62%Belgrade <.BELEX1 731.53 733.01 -0.20% -3.96%

5>

Sofia 579.90 577.63 +0.39% -2.45%

BONDS

Yield Yield Spread Daily(bid) change vs Bund change

in

Czech spread

Republic

2-year <CZ2YT=R 1.6050 0.0140 +225bps -1bps

R>

5-year <CZ5YT=R 1.5310 0.0280 +211bps +1bps

R>

10-year <CZ10YT= 1.6330 -0.0750 +187bps -6bps

RR> Poland

2-year <PL2YT=R 1.6500 0.0100 +229bps -1bps

R>

5-year <PL5YT=R 1.9620 -0.0380 +254bps -6bps

R>

10-year <PL10YT= 2.5030 -0.0440 +274bps -3bps

RR>

FORWARD RATE AGREEMEN

T

3x6 6x9 9x12 3M

interban k

Czech Rep 2.16 2.08 2.01 2.18

<PRIBOR=

>

Hungary 0.30 0.41 0.53 0.19Poland 1.73 1.74 1.71 1.72

Note: FRA are for ask prices quotes

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(Additional reporting by Aleksandar Vasovic in Belgrade and Agnieszka Barteczko in Warsaw Editing by Raissa Kasolowsky and Susan Fenton)