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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CEE FX
- The worsening economic outlook amid rising Covid uncertainty have been weighing on CEE currencies in recent weeks, which have been trading at multi-month lows recently against major crosses.
- As a result, CEE currencies are currently moderately to significantly undervalued relative to the US Dollar according to a range of ‘fair’ value models.
- The chart below ranks the major G10 and CEE currencies based on their percentage difference between the current spot rate and their 'fair' value, which we define using a Behavioral Equilibrium Exchange Rate (BEER) model (using terms of trade, inflation and 10y interest rate differentials as explanatory variables).
- The HUF is currently the most ‘undervalued’ currency against the USD (nearly -18%).
- CZK and PLN are currently ‘moderately undervalued’ against the greenback, by 7.5% and 5.1%, respectively.
- Two significantly ‘undervalued’ currencies among the G10 world are the commodity-currency AUD and ‘risk-on’ GBP, by 16.3% and 15.5%.
- On the other hand, the CHF remains the most ‘overvalued’ currency against the USD (by 8.2%).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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