CEE FX: Mixed PMI and inflation keep zloty capped – ING

Frantisek Taborsky at ING notes diverging PMI signals in Central Europe, with strong Czech sentiment and weaker Poland, but still expects Polish growth above 3% in 2026. Softer Polish inflation and a potentially dovish National Bank of Poland outlook are reflected in modest rate-cut pricing. EUR/PLN faces strong resistance above 4.300, while EUR/CZK and EUR/HUF largely follow rate differentials and remain rangebound.

Zloty, koruna and forint ranges

"Yesterday's PMI in the region showed quite a mixed picture, with the Czech Republic leading the positive sentiment, while Poland surprisingly declined. However, Polish data in recent months does not show a significant turnaround in the direction of the economy, and we still expect strong growth of more than 3% this year."

"On the other hand, Tuesday's inflation in Poland showed another surprise to the downside and the July National Bank of Poland meeting next week may show a relatively dovish picture in the new forecast and forward guidance."

"This is also reflected in market pricing with around 10bp of rate cuts next year. EUR/PLN tested levels above 4.300 yesterday, but strong resistance acted as a rebound lower, closer to 4.290. Although getting above 4.300 would require a significantly dovish signal from the NBP, there is also little reason to expect the zloty to strengthen in the near future."

"On the other hand, the koruna saw some strengthening yesterday, where EUR/CZK follows the interest rate differential. The relationship has recovered in recent weeks and rates point to levels around 24.200 for now."

"Meanwhile, EUR/HUF has seen some stabilisation around 355-356, and we don't see much reason to move for now, but our bias is still down, where 350-356 could be the range for the second half of the year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)