The rise in the 10-year US Treasury yield to its highest level since 2014, near 3 percent, helped the euro weaken in its cross against the dollar, which is closely watched in the European Union's eastern currency markets.

The region's most liquid units, the zloty and the forint weakened by 0.2 percent against the euro by 0842 GMT and the Czech crown shed 0.1 percent.

The region's currencies are still well within the past weeks' typical ranges and near two-month high territories.

"The European Central Bank's guidance later this week, about the future of its stimulus programme, is the next thing that may cause some movement," one Budapest-based dealer said.

Regional government bond yields, meanwhile, reached or tested multi-week highs.

Czech yields joined the rise, not benefiting from an announcement made by Moody's late on Friday about changing its outlook on the Czech Republic's A1 rating to positive from stable.

Moody's said Czech fiscal indicators continued to improve, supported by a strong momentum in economic growth.

Poland revised its 2017 budget deficit to 1.7 percent of economic output from 1.5 percent.

That is still well below the EU's 3 percent threshold, and budget and debt dynamics have been healthy across the robustly growing region.

Poland reported a higher-than-expected 9.2 percent annual rise in retail sales in March, but the Polish central bank is expected to stick to its forecast that interest rates could stay at record lows for years.

The US and euro zone yield rise pushed Polish yields higher, with its 10-year bonds reaching 3-week highs, bid above 3.14 percent.

The only economy in the region where fast growth has produced overheating symptoms, has been Romania, where annual inflation reached 5-year high at 5 percent last month, well beyond the central bank's target.

Its 2-year bond yield was bid at 2.88 percent in early trade, the highest in two months.

An auction of 5-year Romanian government bonds on Monday is "likely to see low demand and partial allocation", Bucharest-based ING analysts said in a note.

The Romanian central bank, which started to lift interest rates earlier this year, is expected to tighten liquidity in local markets further, and that buoys the leu which was steady at 4.6565 against the euro on Monday, the analysts said.

The bank reopened a long-unused deposit facility a week ago to drain liquidity out of leu markets.

Copyright Reuters, 2018