EUR/PLN up on profit taking.
The zloty lost roughly 0.5% vis-a-vis the
euro as the common currency tested bids
around the 3.84 EUR/PLN level on Tuesday,
extending the correction which kicked off on
Monday ahead of the FED decision on rates
today. Regarding trading in the next few
days all will be up to whether the FED even
remotely signals the need for a pause in the
rate hike cycle. If so we could very well see
a return to the 3.80-81 EUR/PLN area
before the week is over. On the other hand
strong economic fundamentals should help
limit potential losses even if the FED sounds
more hawkish than expected. In the short
run the EUR/PLN should encounter ample
resistance first in the 3.85 area then, if
broken, at 3.8750.
The FOMC will make its announcement after
the closing of European markets today, so
the first opportunity for a reaction from the
zloty will be on Thursday morning. With no
relevant economic data on the domestic
front until early next week the market should
stick to the wait-and-see stance throughout
the entire day today.
(CSOB - Investment research)