ING expects Polish inflation to drop to 2.9% in June, reinforcing expectations for unchanged rates and pressure on regional FX.
Central and Eastern European currencies face renewed pressure as a stronger US dollar and lower oil prices lead markets to price out rate hikes in Poland and the Czech Republic. ING strategists note that regional FX, particularly the Polish zloty, may struggle amid these headwinds.
Polish inflation is forecast to decline to 2.9% in June from 3.1% in May, driven by lower fuel prices, while Turkey’s annual inflation is expected to ease to 31.9% from 32.6%. These trends support expectations that Poland’s central bank will keep rates on hold for the remainder of the year.
EUR/PLN is seen testing 4.290 but may face resistance near 4.300. A mixed geopolitical outlook and dollar strength could further weigh on CEE currencies in the near term.