Along with the Hungarian forint the Polish zloty led emerging markets down on Tuesday as the risk aversion story came back into focus after several fairly quiet weeks for the Polish currency. The EUR/PLN started the session at just below 4.0, but easily soared higher right after the opening, right past this mark, extending this week’s losses by almost 1 percent. On the domestic front the lingering uncertainty regarding FinMin Zyta Gilowska’s potential resignation and extremely weak stock market performance only added fuel to the fire. Gilowska who was not available for comment throughout the weekend and on Monday finally denied the resignation claims herself yesterday, putting an end to the speculation, at least for now. The selling stopped just as quickly as it had begun though leaving the zloty at 4.03 EUR/PLN ahead of the US PPI report. The mixed numbers failed to provide the market with discernible direction and the zloty remained locked in the tight 4.025-4.035 EUR/PLN range.
The prospect of the longer holiday weekend in Poland should start to grind in today, hence lower trade volumes can be expected both today and of course on Friday, when many domestic player will still be on leave. Some interesting data will be released though before the markets take a break for the Corpus Christi holiday on Thursday. The May CPI number due at 1400 GMT is widely expected to come in at 0.8% y/y and the zloty should follow track the reaction of the bond market to the data. The most important piece of news will come from the US though - after yesterday’s mixed PPI figures today
it’s time for the consumer inflation report.
ČSOB Investment research