The Polish zloty shed approximately 0.5%
to the euro to trade at 3.5530 EUR/PLN at
the closing on Tuesday as political worries
slowly started to weigh on markets ahead of
the attempt to dissolve the parliament later
this week. Polish MP’s will vote on the
dissolution motion on Thursday afternoon, a
day earlier than previously indicated.
Meanwhile the liberals repeated that they
would not agree to call for earlier elections in
May and appealed for PiS to withdraw the
proposal. However, the conservatives
refused to do so which means that the vote
will almost certainly go along as planned,
even though the fate of the motion seems
sealed since the Civic Platform’s backing is
needed for the Sejm to shorten it’s term. Just
before the end of trade the zloty tried to
break past the 3.95 EUR/PLN mark, where it
encountered strong resistance.
Political jitter push zloty lower again
Political tensions should keep the market on
edge at least until Thursday, hence more
downward pressure on the zloty be expected
today. It may lead to a deeper sell-off which
could end at 3.9750 or even 4.0. Regardless
of what happens today we uphold our view
that due to domestic politics the 3.95-4.00
range is the near term target for the
EUR/PLN.
(CSOB - Investment research)