CEE MARKETS-Crown sits at 12-week low, zloty retreats from 2-1/2 year high

By Jason Hovet PRAGUE, June 13 (Reuters) - The Czech crown hovered around a 12-week low against the euro on Tuesday as easing inflation and comments from a central banker reduced expectations of an interest rate hike this month, while the Polish zloty fell from a 2-1/2 year peak. The zloty has been central Europe's top performer in the past two months, while the crown has retreated from a nearly 15-year high over the same period. Both were weaker on Tuesday, in line with other central European assets despite gains in western European markets. Investors were turned largely to key U.S. inflation data and the Federal Reserve's interest rate decision this week. The crown traded 0.1% lower at 23.80 to the euro at 0851 GMT. Data on Monday had shown Czech inflation easing less than expected in May but still on a downward trend with core inflation falling below expectations. Czech central banker Jan Kubicek told Reuters the bank did not need to hike rates further with the outlook for easing inflation supported by lower wage growth, falling household spending and the government's budget savings programme. Kubicek had been in the narrow majority of a 4-3 vote last month that opted for rate stability over a further hike. Market rates have fallen in the past week with expectations of policy easing later this year. "I have only been feeling one side of interest in interbank trading," one dealer said. In Poland, the zloty fell from its highest level since the end of 2020 hit in the previous session at 4.432 to the euro. It was 0.8% lower on the day at 4.48 per euro by mid-morning on Tuesday. The zloty's gains, totalling more than 5% since mid-April, have helped it catch up to central European peers that had gained sharply earlier in the year. High interest rates in central Europe have helped attract investor flows, although markets are expecting rate cuts to begin later this year. "Combined with the increase in EUR-USD, the current situation creates favourable conditions for local players to buy euros and dollars," Bank Pekao said. However, the bank noted that such activity was yet to be seen on the market with so far only a modest move to a weaker exchange rate, which it said indirectly proved the zloty's strength and capital flows behind its recent appreciation. The Hungarian forint lost 0.35% and Romania's leu edged down 0.1%. Stock markets were mostly steady, although the Budapest index lost around 1%. CEE SNAPSHO AT MARKETS T 1051 CET CURRENC IES Latest Previou Daily Change s bid close change in 2023 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURRSD Serbian 0 0 Note: calculated from 1800 daily CET change Latest Previou Daily Change s close change in 2023 .PX Prague 1317.30 1316.55 +0.06% +9.62% 00 .BUX Budapest 49472.3 50009.7 -1.07% +12.97 9 4 % .WIG20 Warsaw <.WIG20 2044.43 2044.20 +0.01% +14.09 > % .BETI Buchares 12185.7 12187.2 -0.01% +4.48% t 5 4 Spread Daily vs Bund change in Czech spread Republic CZ2YT= 2-year s CZ5YT= 5-year s CZ10YT s Poland PL2YT= 2-year s PL5YT= 5-year s PL10YT s FORWARD 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: are for ask FRA prices quotes ******************************************** ****************** (Reporting by Jason Hovet in Prague and Karol Badohal in Warsaw; Editing by Kirsten Donovan)