A mixed day for the Polish zloty on Friday.
The EUR/PLN first fully recovered from the
sell-off, which pushed the pair up to fresh
almost year-long highs in the 4.07 area on
Thursday, only to inch back to the 4.06-4.07
range as pressure mounted again on
emerging markets later in the session. Thin
liquidity conditions no doubt contributed to
the excessive zloty volatility hence we would
expect less nervousness today as trading
volumes return to normal after the
“weekend” session on Friday.
On the economic front the abundance of
data should keep markets busy throughout
the week. As for today, the May wage
numbers will be released, but with our
estimate at 4.6% y/y barely off the 4.7% y/y
market consensus, we expect no reaction
from either bonds nor from the zloty. With
data uninspiring, the zloty counter trend rally
will have a hard time moving past 4.00
EUR/PLN unless the unfavorable risk
appetite conditions improve. Until then the
unit is likely to remain under pressure, with
4.07 well within reach again today.
(CSOB - Investment research)