On Friday, the Central European currencies saw mixed trading. While the Czech koruna was driven by echoes of Thursday’s CNB meeting and erased a part of previous gains as intervention threats remain in place, both the zloty and the forint strengthened. In case of the zloty, speculations that the state-owned BGK bank may sell euros in the market (that is, intervene in favour of the Polish currency) ahead of Monday’s ECB fixing of exchange rates (takes place at 12:15 GMT) in order to lower the part of farm subsidies coming from state budget might have played some role.
Regarding the week ahead, the calendar is well filled. Apart from the regular monthly report from the US labour market (due on Friday), regional PMI’s will be released tomorrow and the Polish central bank will conclude its two days meeting on Wednesday. However, uncertainty in core markets stemming from US-debtceiling debate and unfolding political crisis in Italy may eventually dominate and prevent the regional currencies from strengthening even if PMI’s confirm tomorrow that recovery in industry has been under way.