Central and Eastern Europe

Central and Eastern Europe

CEE currencies

EUR/HUF (light blue):

1 April 2018: President Orban is re-elected. Political uncertainty launches an upward trend in EUR/HUF. The pair leaves the 305/315 sideways trading band.

2/4 The currencies of both the Czech Republic and Hungary often show inverse correlation with the US dollar. The strong performance of the USD since April/May leads to a weakening of the krona and forint.

3 Markets doubts economic sustainability of Turkey and massively sell the Turkish lira. Hungarian forint (and Czech koruna) suffers collateral damage.

4 Despite strong economic data, Hungarian forint slips because of pressure on emerging countries (Turkey, Russia, etc.).

5 The European Union activates the sanctions procedure (the infamous Article 7) against Hungary, which may ultimately end in the deprivation of voting rights. The effective implementation is highly uncertain because every EU member has a veto. The forint hardly reacts.

EUR/CZK (dark blue):

1 Months-long rally of the Czech koruna bottoms out after the Czech Central Bank (CNB) signalled a pause in the tightening of its monetary policy.

2 Unfortunate combination of pressure on the emerging countries, temporarily reduced liquidity in the run-up to a few holidays and the news regarding a possible reduction in European funding for some Central European countries affects the Czech koruna in the middle of the year.

3 A tough confrontation between Italy's brand new populist government (Lega, 5SM) and Europe seems inevitable. The negative risk climate leads to a collapse of Italian assets and drags along central European currencies, including the krona (and the forint).

5 ‘Buy the rumor, sell the news': In September, the Czech koruna strongly anticipated more central bank interest rate hikes. The central bank put its money where its mouth is, but the krona no longer benefited from it.

Latest updates on economic growth in the region

Slovakia - Economic update

Bulgaria - Economic update

Czech Republic - Economic update

Hungary - Economic update

Forecasts for the Central and Eastern European countries in numbers:

Most recent publications on Central and Eastern Europe:

EU funding for Central and Eastern European regions remains essential

EU-fondsen voor Centraal- en Oost-Europese regio’s blijven noodzakelijk

Diversity in European income trends...but education pays off everywhere

Geen eenheid maar diversiteit in Europese inkomenstrends