Adds Poland rates decision, updates prices

By Anita Komuves and Karol Badohal

WARSAW/BUDAPEST, Nov 6 (Reuters) -Central Europe's currencies recovered on Wednesday after falling to multi-month lows earlier in the session, stocks rose more than 1% and bond yields climbed as markets digested the news Republican Donald Trump won the U.S. presidential election.

Among currencies, Hungary's forint EURHUF= fell the most to hit its weakest level since December 2022 at 412.50 to the euro. By 1352 GMT, it traded 0.2% down on the day at 410.20.

The zloty EURPLN= touched a nearly five-month low before reversing course and trading up 0.2% at 4.35 to the euro as the Polish central bank kept rates on hold as expected at a Wednesday policy meeting.

The Czech crown EURCZK= brushed a three-month low at 25.450 per euro and but later steadied to 25.3380.

In Poland, Warsaw blue-chip stocks .WIG20 rose 0.8% and the 10-year bond PL10YT=RR yield climbed as much as 22 basis points to 5.8860%, staying off more than one-year highs above 6% touched last week. Budapest blue-chips .BUX hit an all-time high.

Markets were processing the return of Trump and the possible impact in the European Union's emerging east.

Analysts generally assume his plans for restricted immigration, tax cuts and tariffs, if enacted, would drive up inflation, potentially limiting how far U.S. interest rates might be lowered and strengthening the dollar.

Dollar strength has in recent weeks reduced the appetite for emerging markets currencies, like central Europe's.

Similarly, a higher U.S. interest rate path than expected will mean central banks in the region, mostly keen to cut interest rates, may not ease policy as quickly.

High rates also put pressure on countries such as Hungary, Poland and Romania that have swollen budget deficits. Already on Wednesday, Polish bond yields climbed.

"Higher interest rates in the U.S. are a problem for many EM countries with deficits and debts," ING said.

Following on from the Polish central bank decision on Wednesday, central banks in Romania and the Czech Republic also meet this week.

In addition, Adam Glapinski, the head of the Polish central bank, which has kept rates steady since two initial cuts toward the end of last year, will speak on Thursday.

The Czech central bank is widely forecast to deliver a 25-basis-point rate cut when it meets Thursday, which would be the eighth reduction in a nearly one-year easing cycle.

Hungary has also been cutting interest rates but recently paused because of the forint's weakness.

Trump's return will bring new economic uncertainties and risks of U.S. tariffs disrupting trade.

Most central European economies are highly export-oriented and are struggling to recover from the inflation surges of the last few years, while factories face weakened demand from trade partners like Germany.

"The economic impact of potential Trump tariffs on European imports would of course be negative for a small open economy like the Czech Republic," Jaromir Gec, economist at Komercni Banka, said.

"However, the biggest unknown is what Trump policies will actually be and what was 'just part of the campaign'."

Reporting by Karol Badohal and Pawel Florkiewicz in Warsaw, Anita Komuves in Budapest, and Jason Hovet in Prague; Editing by Alex Richardson and Barbara Lewis

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