CEE FX Outlook: Romania's Inflation Drops, Favorable Global Conditions Support Stronger Currencies

CEE: Global story favours stronger FX

Romania's inflation numbers for May were released this morning, showing a drop from 11.2% to 10.6% YoY, above market expectations. At the same time, Romania confirmed the lowest inflation within the CEE region. For the rest of the day, the calendar doesn't have much to offer. In the Czech Republic and Poland, we will see April's current account numbers, which recently turned into a surplus in both countries.

Otherwise, the global story will be more interesting for FX markets. Higher EUR/USD and risk-on sentiment indicates positive conditions for CEE FX. The Czech koruna should correct slightly towards 23.75 EUR/CZK after yesterday's depreciation to almost 23.80 EUR/CZK. However, the main focus will be back on the Polish zloty, which is holding near record strong levels ahead of Thursday's European Court of Justice ruling on the FX mortgage case. Given the favourable global conditions, we see no reason for depreciation for now, rather we expect a stagnation around EUR/PLN 4.45.