Central European currencies steady near lows as stocks advance

what happened

Reuters reported that Central Europe’s main currencies held above recent lows on Monday, while regional stock markets advanced as oil prices retreated. Investors continued to monitor Romania’s political deadlock and comments from Polish central bankers. The zloty weakened 0.06% to 4.3890 per euro as markets assessed global developments and the possibility of a Polish rate increase in the coming months. PKO Bank analysts said September US CPI would be the dollar’s key global driver because it could alter expectations for the Federal Reserve’s future rate path.

Poland’s Monetary Policy Council left interest rates unchanged last week. Governor Adam Glapinski said the MPC was prepared to respond if inflation risks increased, but market participants largely viewed the message as indicating that a November hike was unlikely. Central banker Przemyslaw Litwiniuk told TVN24 there was a high probability that rates would remain unchanged through year-end. On Monday, however, central banker Henryk Wnorowski said he was “certainly considering” a November increase, according to the PAP news agency.

The forint gained 0.08% to 365.15 per euro and remained within its recent range. ING said the currency was awaiting the government’s 2027 budget announcement and remained exposed to higher energy prices and a stronger dollar. The leu rose 0.09% to 5.3385 per euro after President Nicusor Dan nominated diplomat Luca Niculescu as prime minister, his fourth nominee in five months following the collapse of a broad pro-European coalition. The Czech crown fell 0.07% to 24.3900 per euro.

At 1026 CET, stocks were up 0.91% in Prague, 0.43% in Budapest, 0.56% in Warsaw and 0.21% in Bucharest. Two-year Czech and Polish bond yields stood at 4.3688% and 4.7010%, while 10-year yields were 5.3257% and 6.2990%, respectively.

why it matters

Regional markets remain sensitive to the stronger dollar, energy costs and shifting rate expectations. Polish officials’ contrasting comments keep the November decision in focus, while Romania’s political stalemate remains relevant for the leu.

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