WARSAW, Nov 18 (Reuters) -Emerging Europe's currencies slipped on Monday, led lower by the Polish zloty, which gave back some gains from recent days as geopolitical tensions and the power transition in the United Statesweighed on Central-Eastern European assets.

On Sunday, three sources told Reuters that outgoing U.S. president Joe Biden had allowed Ukraine to use U.S. arms to strike deep inside Russia.

"The escalation of the war in Ukraine and the upcoming transfer of power in the U.S. to D. Trump in January is a source of uncertainty for investments in assets of Central and Eastern European countries, including Poland," ING BSK analysts wrote in a note.

The zloty EURPLN= shed 0.4% to the euro trading at 4.3355, giving up close to half of its gains since last Tuesday.

A Warsaw-based trader said the optimistic view was that the zloty had clearly gained against the euro in the previous week and remained in the middle of its range in recent months, but that Biden's decision had "opened everyone's imagination", with analysts weighing the odds of escalation.

"If it were to inadvertently go towards escalation, which for now is, of course, not a base scenario, we would see huge volatility, and then, of course, such a play is worth a lot of money," the trader said.

"For now this is not being played, these are some minor movements, though there is clearly some beat on the market at the start of the week, so for now I would suggest taking the optimistic strategy."

In recent days Poland's ministry of finance had given strong support to the zloty, exchanging euros from Brussels on the market, and some investors positioning accordingly, the trader said. The ministry in tended to be active in the second half of the day, according to the trader.

In Hungary, the forint EURHUF= lost 0.3% against the euro, trading at 409.15 ahead of an interest rate decision by the Hungarian central bank on Tuesday.Market expectations suggest that the bank will maintain its interest rate at 6.5%, which is currently the highest in the European Union, tied with Romania.

"The NBH doesn't have many options at the moment despite inflation and GDP surprising to the downside. Friday's move up in EUR/HUF again shows that the risk-off mood here persists," ING wrote in a note.

The forint has shed nearly 3% since the NBH's Sept. 24 rate cut and has hit a 22-month low after the re-election of Donald Trump, whose trade tariff plans could strongly hit central Europe. It is down around 6% against the euro this year, making it the region's worst-performing currency.

Markets have already priced in that the NBH will keep rates on hold and what could move the forint's rate is the statement and commentary from the bank after the decision, an FX trader in Budapest said.

A Budapest-based trader said today's downward move by the forint corresponded with weakening regional peers likely caused by uncertainty around U.S. policies ahead and the stronger dollar, pressuring riskier assets.

Elsewhere, the Czech crown EURCZK= edged 0.2% lower, trading at 25.30 per euro.

"The crown slightly appreciated (after) the hawkish minutes from the CNB's (last) meeting as well stabilisation of U.S. yields," bank CSOB said in a note.

"On the other hand, overall global conditions - astrong dollar, high yields - will probably not give the crown a longer breather, and we do not expected any significant positive impulses that could reverse market scepticism."

Reporting by Karol Badohal in Warsaw, Anita Komuves in Budapest; Editing by Tasim Zahid

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