ING analysts expect the EUR/CZK to remain range-bound between 24.350 and 24.400, as seasonal support offsets the impact of the CNB's dovish pivot, while the Polish Zloty struggles against broader global risk aversion despite a hawkish NBP.
The CNB delivered a dovish signal, with its forecast for the first time aligning with market pricing (PRIBOR peak around 4.55%), pushing EUR/CZK higher toward rates-implied 24.450. However, strong seasonal koruna support in November and December should temper the weakening, so ING expects a range of 24.350-24.400, little changed. Bearish and bullish forces largely offset.
The dovish CNB signal puts upward pressure on EUR/CZK, potentially toward 24.450 on rate differentials, but seasonal koruna strength in November and December should limit the move, with ING seeing a 24.350-24.400 range.
If inflation worsens significantly toward 3% this year and near 4% in 27Q1, the CNB could hike further, and the market is pricing at least two more hikes, which could trigger a hawkish repricing and support the koruna.
The National Bank of Poland's shift toward a more hawkish stance may support the zloty, which would push EUR/PLN lower. However, the article stresses that global factors remain the primary driver, and yesterday's rapid swing back to risk-off sentiment renewed pressure on CEE currencies, limiting conviction.
Yes, the more hawkish NBP stance may provide some support to the zloty, but global risk sentiment remains the primary driver and renewed risk-off pressure is weighing on CEE currencies.
The Czech National Bank's recent dovish signal has put upward pressure on the EUR/CZK, yet seasonal strength in November and December is expected to keep the pair within a 24.350-24.400 range. Meanwhile, the Polish Zloty faces mixed prospects as the NBP adopts a hawkish stance, though global risk-off sentiment continues to dominate CEE currency performance.
The market interprets the CNB's forecast alignment with PRIBOR rates as a dovish signal, though analysts at ING argue that at least two more rate hikes are likely necessary to satisfy market expectations.
While the NBP's hawkish stance provides fundamental support to the zloty, its performance is currently constrained by broader global risk aversion and negative sentiment toward CEE currencies.