The Polish zloty got off to a strong start of the day on Thursday as emerging markets drew support from the upbeat closing on Wall Street the day before and global tensions, which have kept the zloty in the heat recently, eased slightly. Early in the day the EUR/PLN came just short of the 3.93 mark but encountered strong support and gradually retreated to the 3.95 area later in the session.
The zloty would have ended the session somewhere in this range if not for the thin liquidity conditions. Fresh bids appeared out of nowhere just before the closing and reeled the unit back down to 3.93. Looking forward, there's not much on the domestic front in the coming days except the MPC decision on rates and 1Q GDP numbers next Wednesday so the zloty will continue to take cues from what's happening in other emerging markets and offshore till then. We expect the week to end with thinner volumes today with government institutions closed and many Poles taking the day off due to the 4 day visit of the Pope to Poland which began yesterday. If however foreign players remain active ahead of the long weekend in the US this could mean more zloty volatility.