CEE MARKETS-Central Europe's currencies reverse as rally sputters

PRAGUE, Dec 2 (Reuters) - Central Europe's currencies reversed direction on Wednesday as the U.S. dollar regained some ground, curtailing a rally in riskier assets. On stock markets, Prague fell from Tuesday's nine-month low. Warsaw and Budapest edged backed toward recent multi-month highs. The Czech crown and Polish zloty are coming off their biggest monthly gains since 2009 and 2012, respectively, as markets have jumped on hopes of vaccines to turn around the COVID-19 pandemic and other factors. The Hungarian forint also retreated on Wednesday after a jump in the previous session in illiquid markets and amid gains won against a weaker dollar. Analysts say room for further gains was tight and could only come in the zloty and forint's case once Poland and Hungary get settle a row with the European Union, which wants to link funds from its budget and recovery fund to the rule of law. The crown has fallen off highs. It was down 0.2% at 26.33 to the euro at 1023 GMT. The zloty lost 0.2% to 4.462 and the forint weakened 0.1% to 356.90. "A bit of a correction was expected," a Prague dealer said. "Monday's end-of-month flow and cancelled bond auctions caused weakening." The Czech Finance Ministry, which has been able to ease up on borrowing after raising a record amount from markets earlier this year, on Monday said it would scrap a planned auction of three bonds due for Wednesday. Bond yields were mixed. Forward rate agreements continued to tick up on the longer end as markets priced in chances the central bank would return to rate hikes later next year. Uncertainties related to the COVID crisis remained bigger than inflation risks, Czech central bank Vice-Governor Marek Mora was quoted as saying in an interview with Aktualne.cz on Wednesday. Poland's central bank was meeting on Wednesday and widely expected to keep interest rates on hold. CEE SNAPSHO AT MARKETS T 1123 CET CURRENC IES Latest Previou Daily Change s bid close change in 2020 EURCZK Czech <EURCZK 26.3300 26.2825 -0.18% -3.41% = crown => EURHUF Hungary <EURHUF 356.900 356.475 -0.12% -7.22% = forint => 0 0 EURPLN Polish <EURPLN 4.4620 4.4540 -0.18% -4.61% = zloty => EURRON Romanian <EURRON 4.8717 4.8697 -0.04% -1.71% = leu => EURHRK Croatian <EURHRK 7.5510 7.5520 +0.01% -1.40% = kuna => EURRSD Serbian <EURRSD 117.530 117.570 +0.03% +0.03% = dinar => 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2020 .PX Prague 960.56 964.240 -0.38% -13.90% 0 .BUX Budapest 38885.4 38751.9 +0.34% -15.62% 1 8 .WIG20 Warsaw <.WIG20 1866.77 1853.38 +0.72% -13.18% > .BETI Buchares 9336.75 9286.11 +0.55% -6.42% t .SBITO Ljubljan <.SBITO 887.25 885.29 +0.22% -4.17% P a P> .CRBEX Zagreb <.CRBEX 1750.07 1715.22 +2.03% -13.25% > .BELEX Belgrade <.BELEX 713.69 712.07 +0.23% -10.98% 15 15> .SOFIX Sofia <.SOFIX 428.08 427.87 +0.05% -24.65% > BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year <CZ2YT= 0.1320 0.0040 +085bp +0bps RR RR> s CZ5YT= 5-year <CZ5YT= 0.8230 -0.0360 +154bp -4bps RR RR> s CZ10YT <CZ10YT 1.2760 -0.0160 +180bp -2bps =RR 10-year =RR> s Poland PL2YT= 2-year <PL2YT= 0.0900 -0.0240 +081bp -3bps RR RR> s PL5YT= 5-year <PL5YT= 0.4660 -0.0550 +118bp -5bps RR RR> s PL10YT <PL10YT 1.2580 -0.0040 +178bp -1bps =RR 10-year =RR> s FRA 3x6 6x9 9x12 3M interba nk Czech <CZKFRA 0.40 0.47 0.60 0.35 Rep ><PRIBO R=> Hungary <HUFFRA 0.69 0.70 0.71 0.75 ><BUBOR => Poland <PLNFRA 0.21 0.21 0.21 0.22 ><WIBOR => Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague, Anita Komuves in Budapest and Alan Charlish in Warsaw; editing by Larry King)