Core market movements stood behind most of the Polish FX market price action on Tuesday, as liquidity slowly returned to the marketplace after the Easter weekend. With the political situation unresolved and many domestic players still on holiday the EUR/PLN pair drifted in a tight range in the 3.91-3.93 area all day long and basically ignored the stronger than expected wage figures (see more in fixed income part). Later in the session the zloty hit fresh highs following the strong US PPI figures and eventually ended the session gently in the black at 4.91 EUR/PLN.
Apart from the 5Y bond tender the session’s economic calendar is blank, so traders should focus on global trends, particularly the eurodollar today. From the technical point of view the 3.90 level looks rock solid at the moment, although it could eventually come under pressure if progress is made toward a majority government coalition later this week.
(CSOB - Investment research)