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2020/08/06 / Erste Group Research

US dollar weakness and EU package helped CEE FX

As the summer kicked in, liquidity on CEE FX markets declined. Still, there were developments that affected the region.

The US dollar's weakness was driving CEE currencies stronger. After this, however, sideways movement in the USD during the coming months is more likely than continued weakening. If this is right, then CEE currencies could lose some short-term support.

The other support factor was the agreement around the 750bn EU Recovery Fund and the 2021-27 budgetary framework (MFF), which will bring a lot of money in for CEE. This added to the regional currency rally since mid-July. Additionally, the economic recovery seems to be on track, as evidenced by recent PMI, retail sales and industry readings.

Summing it up, we do not perceive major mispricing on CEE currency markets.

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General information

AuthorErste Group Research
Product nameCEE Forex News
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE, Croatia, Czech Republic, Hungary, Poland, Romania, Serbia
Currency in focusCroatian Kuna, Czech Koruna, Hungarian Forint, Polish Zloty, Romanian Leu, Serbian dinar
Sector in focus-


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