On Monday, the Central European currencies saw a calm low-volume trading. The zloty more or less ignored comments of Jan Winiecki, a hawkish member of the Monetary Policy Council, who said he saw a room for another 25 bps rate cut. This was hardly a surprise as more than four cuts are priced in within six months horizon and the National Bank of Poland (NBP) significantly cut its estimates for GDP growth and inflation. We think that the NBP might even decide to decrease interest rates at its next meeting (5th December), especially if the next week’s data confirm the slowdown in the economic activity and if inflation falls further (inflation figures for October are due to tomorrow).
Today in early trading, the regional currencies lose some ground as the lingering debate on Greece weighs on sentiment. At the time of writing, the zloty breaches above resistance and 200 days moving average, both at EUR/PLN 4.17.