CEEMEA CLOSE: USD/EMs claw back on losses as Fed rate cut glee fades

20 SEP 14:16GMT: USD/EMs pared some of this week's losses on Friday as the euphoria from that Fed cut earlier this week fades away. The CEEMEA agenda ran thin to end the week, with most USD/CEEMEA pairs in red as we approach the European close. Notably, we saw where a few major banks were pricing in CBRT rate cuts in the upcoming months. As a recap, Citi analysts stated that the CBRT toned-down language in its statement represents a shift in policymakers' bias towards and less-restrictive stance, expecting rates to be lowered to 45% by yr-end. Elsewhere, Morgan Stanley also noted than the shift in tone from the CBRT's statement increases the chances of an earlier rate cut than MS' base-case scenario of no rate reduction in 2024. Meanwhile, BofA predict the central bank will proceed slowly with easing monetary policy, with a first cut likely in Dec and small cuts thereafter, expecting the main rate at 30% by end-2025. Separately, Commerzbank noted that Turkish assets could approach “a genuine inflection point” if the country sticks to conventional policies and tight monetary policy. Commerzbank revised its forecast for USD/TRY lower to 34.5 from 35 liras for Dec 2024, and to 37 from 38 for Dec 2025. Elsewhere, the HUF and CZK have a modest gain on the EUR on Friday, whilst the PLN is down 0.06% intraday as investors await Moody's to review Poland's credit rating later today.

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