By Jason Hovet

PRAGUE, Feb 2 (Reuters) -Central Europe's currencies gained on Thursday on the back of euro strength, with the Hungarian forint clawing back losses seen this week and the Czech crown testing a fresh 14-year high heading into a central bank rate decision.

Markets widely expect the Czech National Bank to hold its main interest rate steady at a more than two-decade high of 7.00% on Thursday, while not taking the option of a further rate hike off the table.

Analysts, though, forecast rate stability to continue in the first half before cuts begin later in 2023 with signs that double-digit inflation is set to ease this year.

Markets were also tuned to the European Central Bank on Thursday with expectations of a 50 basis point increase keeping the euro - central Europe's main reference currency - strong against the dollar as investors took a dovish cue from the U.S. Federal Reserve.

That gave a boost to risk appetite in central Europe.

The forint EURHUF= was the biggest mover, rising 0.6% by 1005 GMT, while the crown EURCZK= firmed 0.1% to 23.77 to the euro before a rate decision due at 1330 GMT.

Analysts forecast no change to rates.

"For the market, the most interesting thing will be the (Czech central bank's) new outlook, which should show faster economic growth and inflation a bit higher (than previously forecast)," CSOB said.

The crown impact on the policy outlook will also be interesting as it currently is 3% stronger than the bank's most recent assumptions, and is trading at levels last seen in late 2008.

Markets expect the Czech bank to continue to pledge intervening if necessary to prevent any sharp weakening, which it has done since May last year.

In Hungary, the forint was trading at 387.75 to the euro, close to eight-month highs hit last week. The forint has fallen back a bit this week after S&P downgraded the country's debt rating late on Friday last week.

"European rate decisions and subsequent comments could have a substantial impact on currency markets today. The forint has been firming slightly due to the euro's gains and stronger risk appetite," Magyar Bankholding analysts said in a note.

Elsewhere, the Polish zloty EURPLN= rose 0.1% and Romania's leu EURRON= gained 0.2%.

Central European stocks mostly rose, with Warsaw blue chips .WIG20 climbing more than 1%.

Czech utility CEZ CEZP.PR, though, retreated from three-month highs on Thursday after the company said it expected adjusted net profit to drop by almost half this year due to state windfall taxes and price caps.

Polish bank Santander Bank Polska SPL1.WA also gave up early gains won in morning trade. The bank reported fourth-quarter profit a touch above expectations.

Reporting by Jason Hovet in Prague, Krisztina Than in Budapest and Pawel Florkiewicz in Warsaw; Editing by Sharon Singleton

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