CEE FX: Bearish pressure extends – ING

ING’s Frantisek Taborsky notes that Central and Eastern European FX remains under pressure as higher energy prices and weaker EUR/USD drive regional currencies to new lows.

Regional currencies face ongoing strain

"The CEE market remains under pressure. Yesterday’s surge in energy prices and new lows in the EUR/USD pair are pushing regional FX to new lows. In line with our bearish bias, we believe this is far from over."

"EUR/HUF could test 366, but we believe the 368-370 range remains an area for new sellers to enter, effectively capping the pair."

"Meanwhile, the National Bank of Hungary is expected to take a firm stance next week and avoid rushing into rate cuts despite low inflation, which could support the forint, given that one to two rate cuts are currently priced in."