The Polish zloty tracked the Hungarian
forint slightly higher in a calm trade on
Tuesday and eventually ended the session
up by approximately 0.5% against the euro.
Strong zloty buying kicked in after the
slightly disappointing ZEW number in
Germany and with liquidity on the weak side
the EUR/PLN pair easily soared past 3.95.
The rally ran out of stream just as quickly as
it had begun though and the zloty eventually
stabilized in the 3.93 area, it’s strongest
level in just over a week.
On the domestic
political front the ruling conservatives and
leftist Self-Defence continued to work on a
program agreement, which could be signed
as early as today (more in the fixed income
part) while at the same time the PiS
continued to put pressure on the missing link
in the coalition, the peasant party PSL. The
PSL however kept it’s firm and cautious
stance, and reiterated that it would make it’s
mind up on whether to enter the government
no sooner than next week. Hence the final
solution to the political puzzle should not be
expected till after the Easter holidays.
Besides from politics and core markets the
first piece of data this month, on the C/A and
trade balance, may draw some interest
today. Our C/A balance estimates are
slightly below the market consensus largely
because of the broader trade imbalance we
expect in February and as such could bring
about a slightly negative reaction from the
zloty.
(CSOB - Investment research)