Regional currencies remained under pressure on Wednesday. The Czech koruna outperformed its peers in a thin-trading (due to the national holiday). The zloty again disappointed and the EUR/PLN cross rate returned above 4.40 EUR/PLN level.
As far as the zloty is concerned, the outcome of parliamentary election (Oct 9th) might play a bigger role than initially expected. The latest polls unveiled a much tighter difference between the currently ruling coalition led by Civil Platform and the opposition. Markets expect that Donald Tusk will lead the country after the election. In other words, everyone expects that such a setting basically means that planned austerity measures would be kept unchanged. The worse scenario (from the perspective of the zloty) probably is a victory of Law and Justice. According to the latest poll, the difference between the two parties is 5 percentage points (34% vs. 29%). Therefore, apart from the situation in the Euro zone, domestic factors might play against the Polish currency in days ahead.
However, all markets – including those in Central Europe – will eye the EFSF vote in the German Parliament today. It is highly like that the outcome of the vote will be positive. In this respect, it could be moderately supportive for risk and for regional currencies, too.