On Monday, a more or less expected outcome of Poland’s elections and an impressive rebound of the euro bolstered the zloty. The EUR/PLN cross rate drifted to 4.31 EUR/PLN and a yield of 10 year bond dropped by 16 bps. The forint and the koruna followed the zloty and posted solid gains, too. In the afternoon, the koruna was trading below 24.70 EUR/CZK.
Regarding the EUR/CZK currency pair, we expect that the pressure seen in past weeks might slightly ease in sessions ahead as the start of the earnings season in the US might in short-term support CE currencies. Nevertheless, we believe that the room for prospective gains should be capped by 55 days moving average seen at 24.40 EUR/CZK.
Today, Hungary’s CPI inflation for September was released. The inflation was flat in September at 3.6% y/y and core inflation decreased a bit to 3.0% y/y. Beside the seasonal changes of food and clothes, fuel increased a bit. The weak forint had no significant impact on durable goods prices, although this may happen later because the forint got really weak only in recent weeks.
Nonetheless, probably the main regional event today is Slovakia’s vote on the EFSF which is scheduled after 1 pm.