On Friday, CE currencies took advantage of broad rally and posted significant gains. The zloty outperformed its CE peers and gained more than 1.5 percent.
Today, regional PMI figures for June were released. Interestingly, it pointed to a deterioration of business sentiment in Poland whereas the overall index slightly improved in Hungary and the Czech Republic. However, despite the improvement, Czech PMI still remains below the key 50 points level.
In Poland, overall PMI index fell to 35-month low and unlike the Czech index surprised on the downside of expectations. Hence, it might be interesting to follow comments of Polish central bankers as well as take a closer look at the new inflation report which will be discussed on the upcoming meeting (Wednesday).
Apart from regional PMI’s, the market will focus on the US ISM index which will be released today in the afternoon. The headline index is expected to drop from 53.5 to 52.0, but we believe that a bigger decline is likely. This might, in turn, slightly weigh on regional currencies.