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CEE MARKETS-Crown set to end 2022 stronger, forint holds near 400 to the euro

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By Jason Hovet PRAGUE, Dec 30 (Reuters) - The Czech crown edged up to a fresh 10-month high on Friday, while Hungary's forint hung around the psychological 400-per-euro level as it sought to end the year on a strong note after a turbulent 2022. Central Europe's currencies diverged in 2022, with the crown faring the best after the Czech central bank started market interventions in May to prevent a plunge in the currency. It also ended interest rate hikes just as global central banks started tightening. Hungary's forint has lost the most this year, hurt by soaring energy prices after Russia's invasion of Ukraine, and Budapest's ongoing disputes with the European Union over rule-of-law issues that have held up funds from Brussels. The forint is due for a more than 7% fall in 2022, after recovering from sharper losses that had pushed the currency to a record low of 434.40 to the euro in October. While a deal with Brussels over EU funds on Dec. 12 has helped the forint, analysts still do not see next year's expected gains offsetting 2022's drop. The forint was down 0.1% at 400.35 to the euro in mid-morning trade on Friday. Erste Group Bank said in a Dec. 23 outlook note that the eventual flow of EU funds and a positive turn in the current account balance amid easing energy prices would benefit the forint, pushing it further below 400. "These improvements could give some room to maneuver to the central bank and decrease the inflation and yield path," it said. On the other side, the Czech crown was at its strongest since before the Ukraine conflict started in February and has posted a 3% rise this year. "We expect a roughly stability of the crown in the coming months," Ceska Sporitelna analyst Jiri Polansky said. "On one hand, a global economy weakening and expected stability of (central bank) rates should stop strengthening tendencies. But on the other hand, the (central bank) remains ready to intervene, which is an important psychological factor for markets." Poland's zloty edged down on Friday in slow holiday trade. It has lost 2% in 2022. Romania's leu was also steady, on course to end 2022 where it started. Markets are set to continue watching central banks as they push down inflation at double-digit rates. But policymakers around central Europe look to be finished with heavy hiking cycles, which ran earlier than global peers such as the European Central Bank. CEE SNAPSHO AT MARKETS T 1127 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 1200.22 1206.00 -0.48% #VALUE! 00 .BUX Budapest 43837.7 44033.2 -0.44% -13.57% 7 7 .WIG20 Warsaw <.WIG20 1796.49 1802.20 -0.32% -20.75% > .BETI Buchares 11653.6 11616.5 +0.32% -10.78% t 8 5 .SBITO Ljubljan <.SBITO 1058.79 1050.28 +0.81% -15.67% P a P> .CRBEX Zagreb <.CRBEX 1979.88 262.77 +653.4 -4.78% > 7% .BELEX Belgrade <.BELEX 824.61 824.61 +0.00% +0.47% 15 15> .SOFIX Sofia <.SOFIX 595.86 602.86 -1.16% -6.26% > 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 Anna Wlodarczak-Semczuk in Warsaw; Editing by Devika Syamnath)