The Polish zloty held to a tight PLN 4.06-
4.07 range against the euro as CE4 markets
paused for breath with no fresh negative
news to fuel the recent sell-off. The zloty
found some support in government data
suggesting that 1Q FDI’s amounted to USD
3.3 bn., which is roughly in-line with previous
estimates. According to the same
government source the 2006 total should
reach USD 10 bn., up from USD 7.7 bn last
year. The zloty reacted positively to the
industrial output numbers which came in far
on the stronger side of expectations but
gains were capped at 4.06 EUR/PLN by the
bond market sell-off instantly triggered by
the data.
The shaky regional sentiment and soft bond
market performance should keep the zloty
under pressure today. We would expect
range trade, but attempts to break past the
4.07-4.08 EUR/PLN area which would open
the way to 4.10 seem quite likely.
ČSOB Investment Research