PRAGUE, May 20 (Reuters) - The Hungarian forint inched higher on Wednesday as it settled into a new range after retreating from a four-year high, while other central European currencies also steadied, as a strong U.S. dollar and uncertainty over the Middle East conflict weighed on sentiment.

The war in Iran , which began with U.S. and Israeli air strikes on February 28, has rattled markets, lifted energy prices and fuelled inflation concerns.

U.S. President Donald Trump said the U.S. may need to strike Iran again, but added that Tehran was seeking a deal to end the conflict, even as a tenuous ceasefire held.

"CEE currencies have been trading very well since the start of the conflict, and even this week, despite some weakness, we have not seen a break from the usual ranges," ING said.

"For now, we will rather move towards the upper edges of EUR/PLN 4.230-260 and EUR/CZK 24.250-400."

"On the other hand, the risks are building on the downside with the rally of the U.S. dollar in recent days," ING added.

STOCKS MIXED, CZECH DEFENCE GROUP JUMPS

The Polish zloty EURPLN= was a tad lower at 4.2545 to the euro at 0918 GMT, and the Czech crown EURCZK= was a touch higher at 24.322 per euro.

The forint EURHUF= added 0.3% to 361.25 to the euro, and was around the 361 level for a fourth day. It has retreated slowly since hitting a high of 353.95 on May 8.

The market has cheered a change in the Hungarian government after last month's election, with hopes new centre-right Prime Minister Peter Magyar can unlock EU funds held up in past disputes with Brussels. The highest interest rates in the EU have also supported the currency.

Stock markets in central Europe were mixed, with Prague .PX and Warsaw .WIG20 rising.

Shares in Czech defence group CSG CSG.AS , traded in Amsterdam and Prague, soared over 11% at one point after solid quarterly results. The group has refuted a short-seller's report this month that questioned production capacity.

CEE MARKETS SNAPSHOT AT 1118 CET
CURRENCIES		Latest trade	Previous close	Daily change	Change in 2026
Czech crown	EURCZK=	24.3220	24.3300	+0.03%	-0.64%
Hungary forint	EURHUF=	361.2500	362.2500	+0.28%	+6.40%
Polish zloty	EURPLN=	4.2545	4.2520	-0.06%	-0.91%
Romanian leu	EURRON=	5.2285	5.2320	+0.07%	-2.57%
Serbian dinar	EURRSD=	117.3200	117.4500	+0.11%	-0.02%
Note: daily change calculated from 1800 CET
STOCKS		Latest	Previous close	Daily change	Change in 2026
Budapest	.BUX	133222.34	134265.27	-0.78%	+19.99%
Warsaw	.WIG20	3518.89	3586.34	-1.88%	+10.52%
Bucharest	.BETI	30051.43	30014.39	+0.12%	+22.97%
BONDS		Yield (bid)	Yield change	Spread vs Bund	Daily change in spread
Czech Rep 5-year	CZ5YT=RR	4.5000	0.0630	+164bps	+9bps
Czech Rep 10-year	CZ10YT=RR	4.9500	0.0630	+179bps	+9bps
Poland 5-year	PL5YT=RR	5.4660	0.0730	+261bps	+10bps
Poland 10-year	PL10YT=RR	5.7700	0.0480	+261bps	+7bps
FORWARD RATE AGREEMENTS		3x6	6x9	9x12	3M interbank
Czech Rep	CZKFRA, PRIBOR=	3.87	4.28	4.48	3.56
Poland	PLNFRA, WIBOR=	4.08	4.47	4.80	3.85
Note: FRA quotes are for ask prices