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CEE currencies seen weakening 3% vs euro amid rate and policy risks

Societe Generale said Hungary's central bank kept rates at 5.50% and cut its inflation target to 2.5% from 2028, a move it linked to a brief squeeze in EUR/HUF around its 100-day average.

Reported · Written up by our desk · EM Currencies

FXStreet, citing a Societe Generale newsletter, said Central and Eastern European currencies including the Hungarian forint are set to weaken about 3% against the euro this week, as EUR/USD trades below 1.14.

The newsletter pointed to Hungary’s Magyar Nemzeti Bank keeping its policy rate at 5.50% while cutting its inflation target to 2.5% from 2028, which it said briefly pushed EUR/HUF toward its 100-day moving average near 359.76 and lifted 10-year HUF government bond yields by 11 basis points to 5.87%.

Societe Generale also flagged moves in other regional pairs, saying EUR/PLN briefly topped 4.40 after Moody’s downgraded Poland to A3 with a negative outlook, and it noted a separate report of a 42-second Russian helicopter airspace violation.

The newsletter added that the Czech koruna outlook is pressured as the 10-year CZK government bond yield approaches four-year highs of 5.40% after the government approved CZK386 billion.

Latest closeEUR/USD 1.122 ▼0.3%

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