CEE: ECB as a downside risk for the region – ING
|The region switched to muted mode with a quiet calendar in the second half of the week, ING’s FX analyst Frantisek Taborsky notes.
CEE trading will depend heavily on the ECB's tone
“The market seems to be waiting for the ECB decision and even the lower EUR/USD didn't change much on the CEE currencies yesterday. The Czech National Bank blackout period starts today and potentially we may still see some headlines. However, in the last few days, the board has been very active but overall the message is clear.”
“A December pause in the cutting cycle will be on the table and from the tone of the interviews we would say that is the primary scenario for most of the board. A pause in December and February is the baseline of our economists. Board members mention the February forecast as a possibility for additional rate cuts if January inflation is kept in check. While December seems like a done deal, February is open depending on the numbers in the meantime.”
“Today's CEE trading will depend heavily on the ECB's tone. Given the strong levels and rally in PLN and CZK over the past two weeks, we see risk on the downside coming from the possible dovish tone of the ECB. Both currencies have been showing resistance to further strength for the last three days and any signs of weakness on the European side in the ECB comments could lead to profit-taking in our view.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.