Risk-off global sentiment is weighing on Central and Eastern European currencies, with EUR/PLN and EUR/CZK moving towards the top of recent ranges. The noted ranges are EUR/PLN 4.230–260 and EUR/CZK 24.250–400.
Downside risks are increasing as the US Dollar has rallied in recent days. Any negative effects on the economy and the current account are expected to appear in data in the coming months.
Growing Headwinds For Cee Currencies
The Hungarian forint has also started to reflect global trends after recent political events. Long positioning in HUF assets may lead to profit-taking, with foreign exchange seen as an early area for reductions.
The National Bank of Hungary has indicated a dovish stance, which may reduce the appeal of FX carry. EUR/HUF closed at 362, and a move above 365 could affect expectations for NBH rate cuts and feed currency weakness into the rates market.
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The ongoing risk-off sentiment in global markets is not creating a favorable environment for Central and Eastern European currencies. With the US Dollar Index pushing above 106 this month, the strongest it has been all year, we see significant headwinds for the region. We are therefore adopting a more bearish stance on these currencies for the coming weeks.
Upper Range Pressure Builds
We are watching EUR/PLN and EUR/CZK drift towards the upper limits of their recent trading bands, near 4.260 and 24.400 respectively. This move is supported by Poland’s latest industrial production data for April 2026, which missed forecasts and pointed to a slowdown. The path of least resistance for these pairs appears to be a gradual grind higher.
The delayed negative impact on the economy is a primary concern, a lesson we remember from the second half of 2025 when a slump in German exports eventually hit CEE current account balances two quarters later. We expect the recent tightening of global financial conditions to start showing up in the region’s economic data over the next few months. This reinforces the view that downside risks are building for the currencies.
The Hungarian forint, a strong performer throughout last year, is also beginning to show signs of exhaustion amid these global trends. We believe investors may begin to take profits from the long positions they have held in Hungarian assets. In this environment, the currency is the most likely candidate for a pullback.
Furthermore, the National Bank of Hungary’s dovish tone is eroding the appeal of the forint’s carry trade. A break in EUR/HUF above the 365 level would be a critical signal, as this was the point where the market began pricing in rate cuts last year. Such a move could trigger an unwinding of rate positions and feed further currency weakness.
