PRAGUE, July 30 (Reuters) -The forint hit a three-week low on Tuesday after data showed Hungary's economy contracted on a quarterly basis last quarter while the crown continued to limp into a Czech rate decision this week amid some remaining bets rate cuts might not slow.

A weaker dollar gave some support, with investors braced for the start of the U.S. Federal Reserve's two-day policy meeting where they are expected to hold rates steady but open the door to policy easing as early as September - something that could aid central Europe's currencies.

Hungary's forint EURHUF= touched its lowest since July 9 and had weakened by 0.3% to the euro to 394.7 by 0835 GMT.

Preliminary Hungarian data showed the economy contractedon a quarterly basis in the second quarter, for the first time since the start of 2023, as weak demand from European trade partners held back recovery.

"The forint's underperformance (in central Europe) is easily attributable to this morning's GDP data," Zoltan Arokszallasi, an analyst at MBH Bank said.

Economies are counting on a rebound in consumer demand - now that inflation surges from past years have subsided - to propel an economic recovery this year, although manufacturers' struggles weighed heavily in the last quarter.

A similar picture was seen in the Czech Republic where growth was below forecasts.

The crown EURCZK= was little changed at 25.42 to the euro, just above a five-month low of 25.453 hit last week.

All analysts in a Reuters poll last week expected the central bank to slow its interest rate cuts and deliver a 25-basis-point reduction on Thursday.

But low inflation and comments from one central banker about not ruling out another 50-bp cut have weighed on the crown. Markets also continue to price in a chance of a bigger-than-25 bps cut.

"(The rate decision) is still not a done deal" for markets, one trader said.

Elsewhere, the Polish zloty EURPLN= gained 0.3% as the currency traded at 4.28 to the euro, paring Monday's losses.

"The EUR/PLN exchange rate remains in the 4.25-4.30 range... the valuation of the zloty against the euro should remain relatively stable," Bank Millennium said in a note.

"Globally, the event will be the Fed meeting. Although we do not expect any changes in interest rates by the Federal Reserve, its message will be important for the September meeting... however, the reaction of the zloty to the Fed's narrative will be limited."

Reporting by Boldizsar Gyori in Budapest, Jason Hovet in Prague and Karol Badohal in Warsaw; Editing by Bernadette Baum

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