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ING Expect CEE FX Rally to Begin Losing Steam

CEE FX
  • Positive conditions still prevail in the CEE FX market, however, ING expect the current rally to start running out of steam.
  • EUR/USD is struggling to reach 1.10 and ING don't see much room for further risk premium reduction in the EM space. Moreover, inflation numbers this week may return dovish expectations to the region, which should put the brakes on the current FX rally.
  • The Czech koruna and the Hungarian forint remain ING’s favourites, but the room for appreciation is getting thinner. For now, they see a gravity point at 23.30 EUR/CZK and 375 EUR/HUF.

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