* Currencies ease as euro falls on Italy's budget deadline * Markets seek direction after 3-day losing streak * Stocks tread water, but OTP Bank lifts Budapest index By Sandor Peto BUDAPEST, Nov 13 (Reuters) - Central European currencies eased on Tuesday amid dollar buying as the euro remained under pressure, with Italy facing a deadline from the European Union (EU) to cut its budget deficit target.
Flows into the dollar due to risk aversion or expectations for more U.S. interest rate increases have often caused currency weakness in the EU's emerging markets this year.
Central European currencies and stocks took a breather early on Tuesday as investors waited for clues over direction after three sessions of retreat that followed two weeks of gains.
The currencies started to weaken when the euro, after an early rebound versus the dollar, turned south again.
The forint, the biggest gainer in the region earlier this month, led the retreat, shedding 0.2 percent to trade at 322.9 against the euro at 1014 GMT, still not far from last week's 3-month high of 320.8.
It also touched this month's weakest level versus the zloty , even though its regional peer also eased somewhat against the euro.
Traders said there was no fresh news to justify this, with both the Hungarian and Polish central banks expected to keep interest rates at record lows in the next months.
Regional currencies may face some additional pressure if Italy does not cut its deficit goal and disagreements with Brussels lead to further euro weakness, traders said.
"GDP figures from the region (in the next days), if they indeed show a slowdown, may also trigger some reaction, but only temporarily," another trader said.
Regional stock indexes, after an initial rise, trod water near Monday's closing levels, except for Budapest where the main index rose 0.7 percent.
The sole cause of this was a 1.9 percent jump in the shares of Hungary's OTP to 11,210 forints, after the region's biggest independent lender reported strong earnings on Friday.
Some investors were trying to boost the shares well above the 11,000-forint psychological level, Equilor brokerage analyst Zoltan Varga said.
Belgrade's index rose 1.3 percent, lifted by a 6.2 percent increase in the shares of Komercijalna Banka, Serbia's biggest lender, to a 3-month high.
The stock has been volatile after Serbia four weeks ago invited applications for a financial adviser to sell the government's stake in the bank.
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