CEE FX: Dovish stance keeps Zloty and Leu under pressure – ING

ING’s Frantisek Taborsky highlights pressure on the Polish Zloty and Romanian Leu. With the National Bank of Poland holding rates at 3.75%, a dovish policy message could push EUR/PLN towards 4.380–4.400. In Romania, political uncertainty and rating concerns keep EUR/RON near recent highs, with further upside risks if coalition talks fail.

Polish and Romanian FX face headwinds

"The National Bank of Poland (NBP) left rates unchanged at 3.75% on Wednesday, as expected, while its statement offered little new compared with September. Attention now turns to Governor Adam Glapiński’s press conference today. Markets are pricing just under two hikes by year-end and 110bp of tightening in total, setting a high bar for a hawkish message."

"EUR/PLN has stabilised around 4.360-4.380 in recent weeks, but yesterday’s shift back to risk-off sentiment, combined with a dovish NBP message, should push the pair towards 4.380-4.400."

"The National Bank of Romania is expected to leave rates unchanged at 6.50% today, with attention focused on its FX comments. EUR/RON has seen unusual volatility over the past two weeks and yesterday tested fresh highs just below 5.355. Pressure reflects political uncertainty over the formation of a new government and last week’s speculation about a possible rating downgrade."

"We expect the pair to stabilise near current levels rather than return lower, even if a new parliamentary majority is secured. A prolonged political crisis or collapse in talks would likely push EUR/RON higher."