BUDAPEST: The crown touched 6-week lows against the euro on Monday as Czech inflation unexpectedly slowed, while the US-China trade war helped drive down stocks and government bond yields in Central Europe.

April Czech annual inflation dropped to 2.8%.

The crown traded at 25.77 against the euro at 1304 GMT, down 0.1 percent, even though it was off 25.79 reached after the inflation figures.

The Czech central bank (CNB) increased its interest rates for the eighth time in two years early this month after inflation rose well above its 2% target.

Monday's CPI figures add to expectations that the bank is likely to pause its rate hikes for the rest of 2019 but could move either way later.

If Britain quits the European Union without a deal or the euro zone economy slows, the next move may be a cut, Erste group analyst Jiri Polansky said in a note, adding that improving euro zone economic data could lead to a hike.

Goldman Sachs analysts said a hike remained the likely next move. "We continue to think that implied rates for 2020 are too low," they said in a note.

The zloty also eased. The relatively volatile forint reversed its early fall as the euro also strengthened against the greenback.

Warsaw led a decline in regional equity indexes.

Its almost 1.5 percent fall was mainly driven by copper producer KGHM, which shed 3.8 percent.

The head of its Chilean peer Antofagasta said the US-China trade war had slashed the price of copper, which registered its fourth consecutive weekly fall last week.

The trade conflict between the world's two biggest economies has cut risk appetite in global markets, weighing on stock prices and inflation and interest rate expectations.

Luxury car makers Daimler AG and BMW are putting their investments in Hungary on hold as the industry struggles with lower demand and the threat of higher US auto tariffs on car imports from Europe, German media reported.

US President Donald Trump was due to meet visiting Hungarian Prime Minister Viktor Orban later on Monday.

First-quarter economic output figures due from the region's main economies later this week are likely to show growth still outpaced the euro zone though at a slower rate except for Hungary, where analysts project steady 5.1% annual growth.

The Polish and Romanian central banks are expected to keep their interest rates on hold on Wednesday.

The leu bucked the weaker regional trend, trading at 4.761 versus the euro, after Romanian figures showed a surprise rise in annual inflation to 4.1% in April, the region's highest level.