WARSAW, May 24 (Reuters) -The Hungarian forint hovered near multi-month highs on Friday, as an easing U.S. dollar gave Central European currencies more breathing room.

The dollar, which had pushed higher against the euro since Monday after several weeks of losses, slipped slightly on Friday.

An easing dollar usually boosts investor sentiment towards riskier assets and helps emerging market (EM) currencies.

By 0952 GMT, the forint EURHUF= gained 0.3% to 385.60 per euro, nearing its highest levels since February which it hit on Tuesday, and was on track for its fifth straight weekly gain.

"I guess it is rather part of some kind of EM sentiment change... Looking at the eurodollar movements, today you can see some kind of correction after yesterday's really significant dollar strengthening," said ING senior economist Peter Virovacz.

"385 could be kind of a strong floor to go through ... A lot depends, I guess, on today's U.S. data, especially the Michigan sentiment indicator," he said.

Virovacz added that a further increase in U.S. inflation expectations would likely have markets focus on the hawkish Federal Reserve narrative, strengthening the dollar and possibly turning back the forint.

On Tuesday, Hungary's central bank cut borrowing costs, but signalled that scope for more easing would be "very, very limited" amid strong service sector repricing and other risks.

A Budapest-based trader said that in recent days the forint had seen a technical correction after several failed attempts to firm past 385.

"Even though the market got entirely what it expected regarding the size of the rate cut and the communication from the central bank, there were some stop-loss deals and positions being closed, which sent the forint to weaker levels," the trader said.

"Forint buyers returned at levels above 387.... We are back in the 385-390 range," the trader said, adding that Hungary's high interest rates continued to support the forint.

The Polish zloty EURPLN= was steady against the euro at 4.2640, hanging off of the Feb. 2020 high of 4.25 which it touched on Monday.

"The level of 4.25 remains a strong psychological resistance for the EUR/PLN exchange rate and needs new impulses for a further decline," Bank Millennium wrote in a note.

On the equities front in Warsaw, discount retailer Pepco PCOP.WA shares surged over 15% after first half earnings smashed estimates.

Meanwhile the Czech crown EURCZK= also held steady at 24.72 per euro, heading towards ending a five-week firming streak, but settling off a four-month high hit last week.

Reporting by Karol Badohal in Warsaw, Gergely Szakacs in Budapest; Editing by Varun H K

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