CEE currencies suffered large losses last week as risk-off, rates repricing and subsequent dollar rally prevented them from catching a breather.

CEE currencies sold off against both the US dollar and their reference euro last week, with underwhelming economic news from the common currency bloc casting a shadow on open economies of Eastern Europe.

CEE currencies had a good week, rising against both the US dollar and the euro. Gains made against the latter were, however, limited with the currencies generally continuing their range-bound trading.

Despite the improvement in risk sentiment, the region’s currencies have, for the most part, weakened marginally against the euro. Over the past month, all remain within very tight ranges against the euro.

Surprising news concerning a plan to merge two key economic ministries led to a weakening of the forint, which stood apart from the pack. Otherwise, CEE currencies remained resilient in a rather challenging risk-off environment. Dovish comments by NBP President Adam Glapinski also attracted interest.

Signs continue to emerge that fears of a US recession are exaggerated, in the form of solid high frequency data like weekly jobless claims.