By Anita Komuves

BUDAPEST, Sept 27 (Reuters) -Central European currencies eased on Friday, with the Hungarian forint on course for its biggest weekly drop since July after the central bank cut its base rate this week.

The forint EURHUF=, central Europe's worst performer in 2024, eased 0.2% to trade at 397.00 per euro. While the currency started the week at more than two-week highs, it has slipped in the past three sessions. On Tuesday, the Hungarian central bank cut the base rate by 25 basis points to 6.5%.

"The market had expected one more rate cut this year, but the bank's comments on Tuesday were interpreted as opening up the possibility for more, which brought some uncertainty to the forint market," an FX trader in Budapest said.

"But I think the technical level at 398.40 could halt losses in the short term," he added.

Deputy Governor Barnabas Virag told a briefing after Tuesday's rate cut that it was too early to see the scope for policy moves in the next three months and the bank would decide on a monthly basis, weighing the options of no change in rates or a small cut.

"For now, we see no reason to move to the 400 level, but given the repricing in the rates market in a dovish direction, we remain bearish on the forint and potentially expect more weakness," ING wrote in a note.

The forint has dropped around 3.5% this year.

The crown is also showing a year-to-date loss, with the Czech central continuing a rate-cutting cycle started late last year. On Wednesday, the Czech National Bank delivered its own 25-basis-point interest rate cut.

A poorer economic outlook in Germany, the region's biggest trade partner, will also keep some pressure on markets. On Thursday, Germany's leading economic institutes downgraded their forecast for 2024 and now see Europe's largest economy shrinking by 0.1%.

The crown EURCZK= was a touch weaker on Friday, down less than 0.1% and trading at 25.141 per euro.

Elsewhere, the Polish zloty EURPLN= was stable, trading within its recent range off four-year highs. The zloty has gained this year as Polish interest rates stay on hold.

"It's Friday, there is position-squaring, we are heading into the weekend," said a Warsaw-based currency trader.

Stocks in the region were mixed, with Budapest's equities .BUX easing 0.22% while other blue chip indices treaded water.

Additional reporting by Jason Hovet in Prague and Alan Charlish in Warsaw; Editing by Susan Fenton

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