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ING Comments on Euro, Poland's Zloty, Hungary's Forint, Czech Republic's Koruna

BY MT Newswires | ECONOMIC | 09/02/25 06:29 AM EDT

06:29 AM EDT, 09/02/2025 (MT Newswires) -- There seems to be quite a lot of focus on the August eurozone consumer price index release on Tuesday, said ING.

Inflation in the eurozone rose from 2% year over year to 2.1% in August on the back of slowing energy price declines. Core inflation remained unchanged at 2.3% year over year, confirming a rather stable inflation climate despite ample risks to the outlook, wrote the bank in a note.

It now looks like a good time for the European Central Bank to keep rates on hold, but the doves on the governing council could still push for one more cut beforehand, stated ING.

EUR/USD looks quite comfortable at 1.1700 for the time being, pointed out the bank. Long positioning is probably the biggest risk to EUR/USD right now.

However, in theory, the United States jobs releases this week still have the potential to unlock some upside. EUR/USD looks likely to continue trading well within the 1.1650-1.1750 range for now, noted ING.

Central and Eastern European (CEE) foreign exchange opened positively this week, according to the bank. Although the Czech Republic's koruna (CZK) and Poland's zloty (PLN) corrected some gains during the day, Hungary's forint (HUF) is returning to its strongest levels.

Tuesday should be rather quiet in the region ahead of a busier second half of the week with the policy meeting at Poland's central bank (NBP) and inflation prints in Turkey and the Czech Republic.

CEE foreign exchange is supported by a weaker US dollar (USD) and a rebound in global equity markets, which may change quickly due to the local story in the coming days, added ING. The EUR/CZK move down seems too fast to the bank given the move in rates, and although ING remains bullish on the CZK due to the end of the Czech central bank (CNB) cutting cycle, some correction here wouldn't surprise.

EUR/PLN, on the other hand, should head back down below 4.250 if the NBP makes a hawkish cut.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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