CEE: Harder life after US data but still room for gains – ING
The end of the week should be quieter than previous days in the CEE region with only secondary data in Poland and the Czech Republic.
The end of the week set to be quieter in the CEE region
“It was more or less a successful week for CEE currencies, especially in USD crosses as we turned bullish on the region at the end of the last week. We mentioned on Wednesday that the room for a further rally here is shrinking but yesterday's strong US data sent CEE FX into a brick wall.”
“However, part of the CEE market was closed for a local public holiday and we should see some catch up with higher core rates today. The Czech koruna and Hungarian forint markets were open yesterday and saw some losses already. However, we still believe there is more space for the CEE currencies to rally.”
“EUR/USD is coming back after the US data and some pressure on paying rates in CEE following higher core rates should again improve the picture for CEE currencies. We remain positive on the zloty and koruna, whereas for the forint we want to be more neutral at these levels. But it is clear that from these levels it will be harder for CEE to see further gains.”
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