Stronger Dollar and Lower Oil Weigh on CEE FX, ING Says

According to ING strategist Frantisek Taborsky, the combination of a stronger US Dollar and declining Oil prices is renewing pressure on Central and Eastern European (CEE) currencies. Markets have now largely priced out most expected interest rate hikes in both Poland and the Czech Republic, which further weakens the appeal of the Polish zloty and Czech koruna.

Taborsky highlights that this dynamic reflects a broader shift in global risk sentiment, with the dollar strengthening on safe-haven flows while lower crude prices reduce inflation expectations in energy-importing economies. The result is renewed downside risk for regional FX, as carry trades become less attractive and central banks may delay tightening.