Analysts expect Polish Zloty and Hungarian Forint to strengthen, targeting EUR/PLN below 4.300 and EUR/HUF under 358 amid rate normalization.
Central and Eastern European rate curves have repriced sharply, with markets now pricing 60 basis points of tightening in the Czech Republic and 40 basis points in Poland over 18 months. Hungary is expected to see 50 basis points of easing, reflecting a shift of 15-30 basis points across the region in recent sessions.
Despite the divergence between rates and foreign exchange, ING analysts see mispricing versus their forecasts. The recent rally in rates and reduced rate-hike premium have not fully translated into currency strength, leaving room for gains in selected CEE currencies.
The Polish Zloty and Hungarian Forint are expected to outperform peers, with targets of EUR/PLN below 4.300 and EUR/HUF under 358. The Czech Koruna is forecast to weaken, with EUR/CZK moving above 24.200.