CEE MARKETS-Zloty hovers at nearly 2-year high, CEZ shares jump

By Boldizsar Gyori BUDAPEST, May 25 (Reuters) - The Polish zloty steadied just off a nearly two-year high on Thursday as other central European currencies were little moved, while shares of Czech utility firm CEZ jumped and recovered more ground after heavy losses in the past week. The zloty has been central Europe's biggest gainer since the middle of April amid better-than-expected economic data and fading expectations of quick interest rate cuts. But like others in the region, it has faced pressure from a stronger U.S. dollar cutting appetite in the European Union's emerging east. While Poland's central bank has not officially ended a steep hiking cycle that has been on pause, central banker Ireneusz Dabrowski was quoted on Thursday as telling website money.pl that cuts in Poland could be possible at the end of 2023. The zloty was up less than 0.1% to 4.503 to the euro by 1007 GMT, little moved by the comments. Analysts have seen limits on further gains since the zloty hit its strongest level on the previous week since June 2021 . Bank Millennium said the zloty could give up some gains as "the dollar is gaining slightly against the euro." The U.S. dollar was stronger on Thursday as the euro dropped following data showing Germany's economy - an important market for central European exporters - contracted in the first quarter and entered recession. Central Europe's economies have struggled since the middle of last year with weakened foreign demand and high inflation hammering the region's consumers. Hungary's headline inflation was at 24.0% in April. The central bank, though, began an easing cycle on Tuesday when it cut its one-day deposit rate to 17%, from 18%. Despite the rate cut, the forint has stayed strong and is 1.3% off a more than one-year high hit last week, which traders say is because the one-day deposit rate is still at a high enough level to attract inflows. On stock markets, Czech utility firm CEZ was the main mover, climbing around 5% after a roller-coaster week that had cut billions of euros from its market capitalisation after the government approved a bill that will reduce the shareholder majority needed for restructurings at public companies. CEZ's annual general meeting invite was published early on Thursday but did not include any proposals related to a possible split of the company, which analysts said calmed some nerves in the market for now. The government has long said it wanted greater control over the energy sector. CEZ shares dropped as much as 13% last week but have since recovered more than half of that loss. CEE SNAPSHO AT MARKETS T 1207 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 1330.95 1317.25 +1.04% +10.75 00 % .BUX Budapest 46763.8 46303.6 +0.99% +6.78% 6 7 .WIG20 Warsaw <.WIG20 1954.29 1958.63 -0.22% +9.06% > .BETI Buchares 12192.1 12266.6 -0.61% +4.53% t 4 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, Jason Hovet in Prague, Pawel Florkiewicz in Warsaw; Editing by Varun H K)