ING strategist Frantisek Taborsky anticipates that Central and Eastern European (CEE) foreign exchange markets will remain broadly stable this week, despite ongoing volatility in interest rates and global headlines [1]. The central event is the upcoming rate decision by the National Bank of Hungary (Magyar Nemzeti Bank, MNB), which is expected to keep its policy rate unchanged at 6.25% during its first meeting since the general election [1]. Market participants are expected to focus on the bank's forward guidance, particularly in light of the recent energy shock and the notably stronger Hungarian forint following the election outcome [1].
Taborsky highlights that the EUR/PLN and EUR/CZK currency pairs are likely to remain within their established trading ranges of 4.220-250 and 24.250-400, respectively, and does not foresee significant changes in these ranges this week [1]. He also notes that while there is some hawkish risk from Hungary, the overall expectation is for continued FX stability in the region [1].
Regional banks and political developments are also being closely monitored, with the CEE region expected to attract more attention this week compared to the previous, quieter period [1]. Despite the backdrop of rate volatility and global news, CEE currencies have so far demonstrated resilience and stability [1].
CONCLUSION
Central and Eastern European currencies are expected to remain stable this week, with the market's focus on the Hungarian central bank's rate decision and forward guidance. ING's analysis suggests limited FX movement, with established trading ranges likely to persist and only modest hawkish risk from Hungary.