The Polish zloty got off to a unconvincing start of the session on Friday after PiS postponed the “stabilization pact” talks with the parliamentary opposition scheduled to take place that day. Regional sentiments, the continued forint sell-off in particular, finally started to weigh on the market as well pushing the EUR/PLN pair up past 3.83 in early trade. Despite the sour beginning of the day the market quickly managed to erase all losses later in the session as buyers gradually returned to the marketplace ahead of next week’s heavy eco and political calendar. The zloty shifted back into sideways trade in the 3.82 EUR/PLN area. We believe, that with the political outlook still hazy the zloty will be unable to find clear direction in the days to come. Our expectations concerning the MPC decision on rates on Tuesday and GDP data today are pretty much in line with the market consensus, hence the both the figures and decision should be fairly neutral for the zloty. As for today’s intra-day trading politics will remain the main force behind the price action.
(CSOB - Investment research)