CEE currencies weaken against the euro as EUR/PLN nears 4.420 and EUR/HUF moves above 365, driven by a stronger dollar and rising energy prices despite a 5-8bp rate increase across CZK and HUF curves.
The zloty has weakened back to EUR/PLN near 4.420, its local high, as rebounding global energy prices and the dollar hitting new highs pressure CEE currencies. ING maintains an explicit bearish bias on CEE FX, meaning the pair is expected to rise further ahead of local GDP data. The trend is already in place, so incremental surprise is limited.
The koruna has fallen to leave EUR/CZK at its highest since mid-October, driven by higher energy prices and a stronger dollar. Rising CZK rates (roughly 5-8bp across the curve) have not offset the FX pressure, and ING maintains its bearish CEE FX view with further koruna weakness expected before CNB minutes.
The forint has weakened with EUR/HUF moving above 365 as energy price rebounds and dollar strength weigh on CEE currencies. HUF rates also rose roughly 5-8bp along the curve, but ING keeps a bearish CEE FX stance and sees further downside for regional currencies including the forint.
Central and Eastern European currencies face renewed downward pressure as a stronger US dollar and rebounding global energy prices weigh on the region. ING strategist Frantisek Taborsky maintains a bearish outlook for CEE FX, noting that EUR/PLN has returned to 4.420, while EUR/CZK reached its highest level since mid-October.
ING expects the zloty to weaken further against the euro, with EUR/PLN near 4.420 and more downside for the currency seen ahead of local GDP data.
The rebound in global energy prices and the US dollar hitting new highs have outweighed the roughly 5-8bp rise in CZK rates, and ING expects further koruna weakness.
Yes, ING maintains a bearish view on CEE FX with EUR/HUF above 365 and sees further downside for regional currencies as dollar strength and energy prices persist.