CEE MARKETS 1-FX down on euro zone debt worries, North Korea

                                
 WARSAW, May 25 (Reuters) - The Polish zloty led losses among
Eastern European currencies in early Tuesday trade as the
weekend takeover of a Spanish savings bank and geo-political
risk caused by North Korea added to market jitters, pushing the
region's assets lower.
                                
 Central Europe's economies are closely tied to the euro
zone, where investors fear tough fiscal measures mainly in
southern states will dent the bloc's fragile economic recovery.
                                
 Additionally, North Korean leader Kim Jong-il has told his
military it may have to go to war but only if the South attacks
first. [ID:nSGE64O03B]
                                
 "Spain and North Korea contributed to the global markets'
falls, dragging the zloty," said one Warsaw-based dealer. "And
taking into account yesterday's gains, the region's markets have
room to fall."
                                
 By 0718 GMT the zloty <EURPLN=> was 0.8 percent weaker
against the euro and traded at 4.136. 
                                
 The Polish central bank's Monetary Policy Council (MPC) is
due to announce its monthly interest decision later in the day.
None of the analysts polled by Reuters expect a rate move and
the decision is unlikely to affect the zloty.
                                
 The Czech crown <EURCZK=> was flat against the common
currency. Investors were looking ahead to the country's
elections this weekend but with a winner far from certain, it
could result in market uncertainty over weeks or months.
                                
 The overwhelming majority of analysts polled by Reuters last
week said a weak government, with no strong majority to kick off
reforms and cut the budget, was one of the main risks from the
Czech vote.
                                
 Markets in Hungary and Romania got back into full swing
after a holiday on Monday, with Hungary's forint <EURHUF=> and
Romania's leu <EURRON=> 0.3 percent and 0.1 percent weaker,
respectively.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  25,655   25,655      0%    +2,58%
Polish zloty     <EURPLN=>   4,136    4,103   -0,8%    -0,77%
Hungarian forint <EURHUF=> 280,15   279,42    -0,26%   -3,5%
Croatian kuna    <EURHRK=>   7,269    7,267   -0,03%   +0,55%
Romanian leu     <EURRON=>   4,184    4,182   -0,05%   +1,28%
Serbian dinar    <EURRSD=> 102,573   101,81   -0,74%   -6,53%
All data taken from Reuters at 0918 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
                                
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 (Reporting by Reuters bureaus, Writing by Dagmara Leszkowicz)