Currencies in Central Europe are expected to continue to draw support from a weaker U.S. dollar over the next six months, but the Hungarian forint is expected to ease from its 10-month high, according to a Reuters poll on Wednesday.
The region’s currencies have performed strongly in recent weeks, with the Czech koruna hitting an 18-month high, boosted by easing global trade uncertainty after the European Union and the U.S. reached a tariff deal and a weaker U.S. dollar.
Aggressive monetary policy approaches by the Hungarian and Czech central banks have also helped to strengthen the forint and koruna.
However, analysts in the survey expect the forint to lose its appeal by the end of the year as inflation starts to ease and the economy begins to feel the impact of U.S. President Donald Trump’s trade policies, mainly indirectly.
In the survey, the median forecast was for the forint to fall 1.7% to trade at 405.00 against the euro in six months.
Investors in Hungary are also watching for the possibility of the central bank cutting interest rates again, with parliamentary elections due next year raising concerns about the potential for increased fiscal spending.
Romania’s currency, the leu, is also expected to weaken over the next six months, with the median forecast for the survey putting it at 5.12 against the euro, down 0.9% from Tuesday’s close.
The new government in Bucharest faces a long challenge to reduce the EU’s largest fiscal deficit, a process that could put pressure on the currency’s value.
Meanwhile, the Czech koruna and Polish zloty are expected to be more stable, with both expected to be little changed over the next six months. Analysts expect the koruna to remain around 24.60 against the euro over that period.
The Czech National Bank (CNB) is taking a cautious approach to its monetary easing cycle, although many analysts expect another rate cut by the end of the year.
Poland has begun cutting interest rates in recent months after a long pause, but the currency is expected to remain in a range of 4.25–4.30 against the euro and is forecast at 4.27 in six months – 0.4% stronger than Tuesday's closing level.
