Strong Dollar Continues to Pressure CEE Currencies

The strong US Dollar (USD) has been putting pressure on emerging markets, and Central and Eastern European (CEE) currencies are no exception. According to Frantisek Taborsky at ING, this trend is likely to continue, with several regional currencies facing further weakness.

The EUR/PLN pair has already seen a significant spike, exceeding bear expectations, but it may stabilize before moving higher again. The EUR/HUF, on the other hand, appears more vulnerable, and a hawkish decision from the National Bank of Hungary (NBH) could offer some support to the forint.

The Czech National Bank (CNB) meeting is also crucial, where rates are expected to remain unchanged at 3.75%. Despite market expectations, which imply more than four rate hikes, the CNB is likely to maintain a dovish tone, pushing the EUR/CZK pair higher and potentially above 24.350.