This morning we saw November inflation in Turkey, which fell from 48.6% to 47.1% YoY, slightly higher than market expectations. The 2.2% MoM reading may cast some doubt on whether the Central Bank of Turkey can start its cutting cycle at the December meeting. Hungary will also release final third-quarter GDP numbers, which should confirm the economy's return to recession with -0.7% QoQ. Also in Hungary, we could see several speakers today including the Minister for Economy Marton Nagy, ING’s FX analysts Frantisek Taborsky notes.

PLN and CZK continue to gain

“CEE FX continues to diverge with HUF weakening further following Moody's decision to change the rating outlook from stable to negative and also lower EUR/USD. On the other hand, PLN and CZK continue to gain. As we discussed yesterday, while we believe this part of the region should follow HUF, tactically we see reasons for further gains here this week.”

“Both PLN and CZK markets underperformed the rally in EUR rates yesterday, further stretching rate differentials to support the currency. In CZK in particular, we see a renewed relationship between rates and FX, which could lead below 25.200 EUR/CZK this week.”

“PLN is not showing such a strong relationship but is likely helped by the closure of earlier short positioning, which is dampening the pullback of lower EUR/USD. Additionally, the National Bank of Poland press conference on Thursday has the potential for some hawkish repricing, which would add additional impetus to PLN and we could see levels below 4.280 in EUR/PLN this week.”