WARSAW, May 7 (Reuters) - Central European currencies firmed on Thursday, as markets eyed a potential deal to end the war with Iran, while waiting for an interest rate decision in the Czech Republic and the Polish central bank governor's press conference.

President Donald Trump predicted a swift end to the war with Iran on Wednesday, as Tehran considered a U.S. peace proposal that sources said would formally end a conflict that has sent oil prices soaring and shaken the global economy.

"There's a lot of strengthening on the back of ... Trump's new proposal to Iran and geopolitics," said a Warsaw-based FX trader. "We had this positive wave across the markets."

The Hungarian forint EURHUF= has been the currency in central Europe which has been most sensitive to developments regarding the war in Iran, and on Thursday it posted the biggest gains in the region, rising 0.42% to 357.30 versus the euro, its strongest since February 2022.

"In yesterday's trading, the rate fell below a key support level following favourable news regarding the conflict in the Middle East," brokerage Equilor wrote in a note. "If the breakdown proves to be significant, the next key support levels are at 355 and then 350."

MARKETS PRICING IN HIKES

The Czech crown EURCZK= was 0.07% firmer at 24.324 ahead of a central bank meeting which analysts expect will see the cost of credit stay on hold at 3.50%.

Markets are pricing in nearly two rate hikes over the next six months. The bank has said it was ready to react to risks from the Middle East conflict but is watching for the second-round effects of rising inflation.

Inflation data on Wednesday showed the headline rate rising to 2.5% year-on-year, but staying within the tolerance band around the bank's 2% target.

"The war has shifted the risk balance. The resulting surge in energy prices, with domestic fuel costs rising sharply and wholesale natural gas prices up significantly, introduces clear upside risks to the inflation outlook," Commerzbank said.

The Polish zloty EURPLN= was 0.05% firmer at 4.2315 ahead of National Bank of Poland (NBP) Governor Adam Glapinski's press conference, which is scheduled for 1300 GMT.

The NBP kept its main interest rate at 3.75% on Wednesday, in line with analysts' expectations, due to uncertainty over the war in Iran and its impact on the economy. Investors will be looking for signs of a hawkish shift in Glapinski's comments.

"We'll see whether the NBP is going to keep the rates on hold, bearing in mind that the market is pricing in rate hikes," the Warsaw-based trader said.

The Romanian leu EURRON= was flat at 5.268, hovering around the record low levels it has reached since lawmakers toppled Prime Minister Ilie Bolojan's pro-EU government in a no-confidence vote on Tuesday.

CEE MARKETS SNAPSHOT AT 1028 CET
CURRENCIES		Latest trade	Previous close	Daily change	Change in 2026
Czech crown	EURCZK=	24.3240	24.3410	+0.07%	-0.65%
Hungary forint	EURHUF=	357.3000	358.8000	+0.42%	+7.57%
Polish zloty	EURPLN=	4.2315	4.2335	+0.05%	-0.38%
Romanian leu	EURRON=	5.2680	5.2678	-0.00%	-3.30%
Serbian dinar	EURRSD=	117.2800	117.3800	+0.09%	+0.02%
Note: daily change calculated from 1800 CET
STOCKS		Latest	Previous close	Daily change	Change in 2026
Prague	.PX	2544.43	2526.7100	+0.70%	-5.26%
Budapest	.BUX	135565.65	135899.33	-0.25%	+22.10%
Warsaw	.WIG20	3617.46	3629.57	-0.33%	+13.61%
Bucharest	.BETI	29544.09	28856.51	+2.38%	+20.89%
BONDS		Yield (bid)	Yield change	Spread vs Bund	Daily change in spread
Czech Rep 2-year	CZ2YT=RR	3.9800	-0.0340	+142bps	-3bps
Czech Rep 5-year	CZ5YT=RR	4.3260	-0.0560	+165bps	-5bps
Czech Rep 10-year	CZ10YT=RR	4.7870	-0.0490	+180bps	-4bps
Poland 2-year	PL2YT=RR	4.4320	-0.0810	+188bps	-8bps
Poland 5-year	PL5YT=RR	5.1770	-0.1080	+250bps	-10bps
Poland 10-year	PL10YT=RR	5.5780	-0.0450	+259bps	-4bps
FORWARD RATE AGREEMENTS		3x6	6x9	9x12	3M interbank
Czech Rep	CZKFRA, PRIBOR=	3.77	4.01	4.12	3.56
Poland	PLNFRA, WIBOR=	3.99	4.19	4.35	3.84
Note: FRA quotes are for ask prices