CEE MARKETS-Hungarian forint cools as EU funds stay in focus

PRAGUE, Nov 29 (Reuters) - The Hungarian forint cooled on Tuesday after gains in the past two sessions, but held near a one-week high as markets maintained expectations Budapest can unlock some EU funds in the coming weeks. Concerns over European Union funds have been one of the big risks for the forint this year while Hungary and the EU executive have been locked in rule-of-law disputes. A deal on funds is required for a significant strengthening of the forint, traders and analysts have said. The currency is central Europe's worst performer so far this year and has shed almost 10%. The forint had eased 0.2% to 407.20 to the euro by mid-morning on Tuesday, but it has gained around 2% since trading beyond 415 last week. "The forint could continue to be mostly affected by reports about the negotiations on EU funds," analysts at Takarekbank wrote. The European Commission is likely to approve Hungary's post-pandemic recovery plan this week to keep open the possibility of EU disbursements later, but hold back any payouts until Budapest fulfils all agreed conditions, sources have said. On Tuesday, Hungary's minister in the negotiations, Tibor Navracsics, said the government expected its recovery fund plan to be approved by EU finance ministers on Dec. 12. He also said he expected the Commission to recommend EU governments suspend 65% of transfers from the EU budget to Hungary, equating to about 7.5 billion euros. The forint was followed lower by the Polish zloty, which also dropped 0.2%. The Czech crown and Romanian leu were little moved. Stock markets in Prague and Warsaw fell 1.3% and 0.5%, respectively, and failed to get a boost from better global sentiment that was lifted by hopes of looser COVID pandemic measures in global economic powerhouse China. Czech lender Komercni Banka traded for the first time without a right to a special dividend, prompting a more than 6% drop and weighing heavy in Prague. CEE SNAPSHO AT MARKETS T 1051 CET CURRENC IES Latest Previou Daily Change s bid close change in 2022 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calcula 1800 daily ted CET change from Latest Previou Daily Change s close change in 2022 .PX Prague 1219.52 1235.44 -1.29% n/a 00 .BUX Budapest 45973.4 45588.7 +0.84% -9.36% 8 4 .WIG20 Warsaw <.WIG20 1719.50 1728.74 -0.53% -24.15% > .BETI Buchares 11597.7 11530.2 +0.59% -11.21% t 9 1 .SBITO Ljubljan <.SBITO 1062.36 1052.82 +0.91% -15.38% P a P> .CRBEX Zagreb <.CRBEX 1906.69 1907.53 -0.04% -8.30% > .BELEX Belgrade <.BELEX 813.84 813.97 -0.02% -0.85% 15 15> .SOFIX Sofia <.SOFIX 597.60 596.62 +0.16% -5.99% > Yield Yield Spread Daily (bid) change 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 FRA ask quotes prices *********************************** *************************** (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest, and Alan Charlish in Warsaw; Editing by Kirsten Donovan)