CEE MARKETS-Zloty at 2-year high before Polish c.bank chief talks rates, forint off peak

By Boldizsar Gyori BUDAPEST, June 7 (Reuters) - The Polish zloty touched a two-year high against the euro on Wednesday and the Hungarian forint was just off a 14-month peak as the currencies held firm while awaiting further clues about how quickly interest rates may fall this year. Markets were turning to an afternoon news conference from Polish central bank Governor Adam Glapinski after the monetary policy council on Tuesday left its key interest rate at 6.75%, keeping a steady policy as inflation begins easing. Investors are betting rates could fall by the end of the year, and while Glapinski has not previously called an end to the sharp rate hiking cycle that started in 2021 and paused last year, he has said he hoped a cut could be debated in 2023. With high interest rates remaining and attracting flows, though, the zloty sat around its highest since June 2021 on Wednesday, trading at 4.48 to the euro at 0846 GMT and just off a morning peak of 4.47. "It is more global sentiment that is deciding the zloty," ING said, adding it was difficult to say what role finance ministry market operations might have. "However, the strong long market positioning and dovish (central bank) leads us to a rather bearish view on the zloty and we see a rather higher EUR/PLN after the end of the press conference today above 4.490." In Hungary, the forint held onto recent gains, unmoved by data showing a sharp drop in industrial output in April that indicated the economy is still a bit away from pulling out of recession quickly. Investors are awaiting inflation data due on Thursday, and the forint was steady against the euro at 368.75. Hungary's central bank began to cut its one-day deposit rate in May, to 17% from 18%, despite inflation remaining well above 20%. "If tomorrow's CPI data shows receding inflation that is good news overall, indicating faster rate cuts, lowering debt-service costs," a Budapest-based analyst said. On debt markets, Czech bond yields were mixed ahead of a regular auction on Wednesday, the first since budget data last week showed a record deficit in the January-May period that almost equalled the government's full-year target. The government is seeking savings this year to keep the deficit in check and bonds have yet to react to risks of growing issuance, with appetite from foreign buyers remaining strong, dealers say. CEE SNAPSHO AT MARKETS T 1046 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 1301.48 1309.13 -0.58% +8.30% 00 .BUX Budapest 48286.9 48287.2 -0.00% +10.26 6 5 % .WIG20 Warsaw <.WIG20 2036.09 2053.44 -0.84% +13.62 > % .BETI Buchares 12187.2 12163.0 +0.20% +4.49% t 7 1 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 Boldizsar Gyori in Budapest, Pawel Florkiewicz in Warsaw and Jason Hovet in Prague Editing by Mark Potter)