CEE MARKETS-Leu regains some ground, markets await US payrolls

WARSAW, Oct 2 (Reuters) - The Romanian leu was recouping some losses from the previous day while most other central European currencies were a touch higher on Friday, with investors looking forward to labour market data from the US later in the day.

The leu touched an all-time low of 5.39 on Thursday, recording its biggest daily drop since the current political crisis started brewing in April.

Prime Minister-designate Siegfried Muresan lost a vote of confidence in parliament this week, extending a crisis that has already sent Romania's currency to record lows and pushed the country's local 10-year bond yields up some 60 to 80 basis points to one-year highs in the past two weeks.

Two traders in Bucharest said the central bank stepped away from currency markets on Thursday, after regularly intervening to curb sharp leu depreciation. They expected the step back to be temporary.

On Friday, the leu was up 0.2% at 5.3350 per euro at 0753 GMT.

S&P Global is due to review Romania's credit rating on Friday. The country sits at the lowest rung of investment grade, with a negative outlook, but most analysts do not expect a change.

"Our baseline is for no rating change today, supported by an improving fiscal profile and continued EU fund inflows, but market stress has raised speculation about a downgrade," ING wrote in a note.

"A downgrade, particularly a loss of investment-grade status, would likely trigger renewed pressure on Romanian assets and a sharper reaction in both FX and bonds than seen this week."

With turbulence in global markets and the ongoing political stalemate at home, Romania's debt managers refrained from selling any July 2031 bonds at a Thursday tender.

POLAND CAPS FUEL PRICES AGAIN

Elsewhere, the Polish zloty was unchanged on the day at 4.3760 per euro after President Karol Nawrocki signed a windfall tax bill into law, allowing the government to reintroduce measures to cap fuel prices.

"Polish debt markets could be supported by the president signing the windfall tax bill into law; this measure will lower inflation in the coming months and, in our view, it reduces the risk of an interest rate hike this year," Bank Millennium said.

Benchmark 10-year Polish bond yields were 13 basis points lower at 6.227%.

Shares of Poland's biggest oil company, Orlen PKN.WA, dropped by nearly 3% as it will be the largest payer of the new tax.

Investors in the region will also be looking at payroll data from the US later in the day which could influence the dollar and Treasuries.

The 10-year US yield was last at 5.247% on Friday while the rest of the bond market also steadied as traders braced for the jobs data that could influence the near-term policy outlook after a soft inflation report dented October rate hike bets.

The Hungarian forint was up 0.4% at 368 per euro.

"Yesterday the forint took a beating, too, like all others, there was a huge risk off wave, but apparently the 200-day moving average around 369.30-40 per euro is very strong, it held the forint from falling further. Now it is back in its recent range, between 365 and 368," an FX trader in Budapest said.