Central and eastern Europe currencies get sideswiped by Trump

"Trump trades" in the weeks before and after the US election saw stocks, cryptocurrencies and the dollar appreciate. The USD move was at least in part driven by the president-elect's vow to impose inflationary tariffs on imports. But while nations like China and Mexico are usually perceived to be the most in Trump's crosshairs, some of the hardest-hit currencies since Nov. 5 have been found in central and eastern Europe.

The Czech koruna, the Hungarian forint and the Polish zloty all depreciated by roughly 2% on Nov. 6. While they pared those losses in subsequent trading days, the drop vs. "King Dollar" resumed; depreciation since the election now stands at about 4%.

This is likely due to these nations' deep economic links to Germany – their biggest trading partner. There's no shortage of concern about Trump's tariff policies in the eurozone; Germany's most recent political crisis is probably also showing up in koruna and zloty trading, as well. While most of the world was focusing on the US vote, Chancellor Olaf Scholz sacked Finance Minister Christian Lindner, essentially collapsing the "traffic light" coalition between the Social Democrats, FDP (liberals) and Greens.

Outside the EU, the currencies of Ukraine, Russia and Turkey were little changed after the US election outcome – reflecting those economies' very different dynamics.

Our second chart, a box plot, visualizes the volatility of these currencies against the greenback via daily percentage changes and their distribution in 2024. Here, Russia's ruble stands out -- a reflection of the Ukraine war, sanctions and and knock-on effects in the oil market.

Year-to-date, the Turkish lira has weakened the most against USD; it's lost 16.4% of its value as the central bank attempts to bring down some of the world's highest inflation. And for 2024, the Polish zloty has in fact posted the smallest depreciation against USD (just 3.8%).

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