Romania’s March inflation rose from 9.3% to 9.9% year on year, above market expectations. Inflation is expected to stay above 10% in the coming months and peak in April at about 11%.
This outlook points to the National Bank of Romania keeping rates unchanged for longer. No rate cuts are expected in 2026.
In the Czech Republic, the final March inflation estimate is due after a flash reading that rose from 1.4% to 1.9%, below market expectations. Attention is on core inflation after February’s 2.7%.
The Czech National Bank is expected to keep policy unchanged this year. EUR/CZK has moved below 24.350 and is close to 24.250, but a return to 24.250 is not expected under current geopolitical uncertainty and with two CNB rate hikes priced in.
In Hungary, EUR/HUF is expected to stabilise in the 355–360 range.
The recent Romanian inflation print of 9.9% signals that the National Bank will likely keep its policy rate at 7.00% throughout 2026. This reminds us of the persistent price pressures we battled back in 2024, which kept rates elevated for an extended period. For traders, this points towards using Forward Rate Agreements to bet on Romanian interest rates remaining high for the rest of the year.
In the Czech Republic, the situation suggests a period of stability, with the CNB expected to hold its key rate steady, much as it did for most of 2025. With EUR/CZK unlikely to break significantly below the 24.250 support level that has held firm this quarter, we see limited upside for the koruna. This stability makes selling volatility an attractive strategy, such as selling EUR/CZK strangles with strikes set outside the expected range for the coming months.
Hungary remains our preferred market in the region, with the forint showing resilience now that the aggressive rate-cutting cycle from last year appears to be pausing. We anticipate the EUR/HUF exchange rate will settle into a 355–360 range, a significant strengthening from the levels above 380 we saw just last year. Traders should consider buying put options on EUR/HUF, which would profit if the pair moves down towards the lower end of this target range.
