CEE Exchange Rates Report for July 14th-18th

By: Peter Ort The Quinnipiac University Global Economics Research Team 

CEE Currencies Index 

 Source: Eurostat and own calculations. Exchange rates are inverted to be Euro per local currency (i.e., an increase indicates a stronger domestic currency) and then indexed to 100 at the start of the period.  

During the week of July 14-18, all currencies maintained similar trajectories, with them taking significant shifts upward in exchange rate and quick shifts down together. The Czech koruna (orange) was the one currency that dipped a little before shifting up, starting at a low of a -0.1% change in exchange rate before hitting a high of a 0.75% change. Similar to the koruna, the Romanian leu (purple) also peaked at a 0.75% exchange rate for this week, although it was consistently a 0% change in exchange rate before the shift. The Polish zloty (blue) reached the highest peak out of the other currencies, hitting about a 0.8% change in exchange rate and ended around a 0.1% change in exchange rate like the rest of the currencies. Finally, the Hungarian forint (green) went up to about a 0.7% change in exchange rate but unlike everything else, it interestingly held that exchange percent change for a day straight, before shooting back down to a 0.1% change as did all other currencies.

CEE Currencies Historical Trends 

 Source: Eurostat and own calculations. Exchange rates are inverted to be Euro per local currency (i.e., an increase indicates a stronger domestic currency). The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.  

Of all the currencies, the Czech koruna (CZK) fell the least in exchange rate, although it is down to a 0.047 exchange rate as opposed to the 0.048 rate from last week. Just like the koruna, the Hungarian forint (HUF) fell from a 0.00295 to a 0.0029 exchange rate. The Polish zloty (PLN) alternatively fell a bit steeper than all other currencies but recovered more than others within the past week, staying around the 0.275 exchange rate range. The Romanian leu (RON) fell around the same as the other currencies, fortunately not as volatile as it was a few months ago, as it continues to wade around a 0.23 exchange rate.

Additional Reading

Traders largely shrug off tariffs before US consumer price data

One of the many reasons that Central European currencies quickly went up and then down in exchange rate against the USD is due to another threat from Trump of more tariffs on the European Union. However, unlike his first threat of tariffs in April, the markets have appeared to mellow out and are instead awaiting fed chairman Jerome Powell’s statement on interest rates, as Powell plans on increasing them due to expecting inflation in the near future while Trump wants to decrease them. By this point, most of Europe sees that the US is taking on more and more unsustainable finances, causing them to be less frantic about any trade/economic threats from the US in the future.