The Polish zloty held to the 4.06-4.09 EUR/PLN range on Wednesday unable to profit from the unexpected third rate hike this month in Turkey amid thin volumes ahead of the all-important FOMC decision today. On the domestic front, the Polish MPC left borrowing costs unchanged as expected and made headlines for a brief moment with its communiqué later in the session (see more in fixed income part), but with the domestic scene overshadowed by the today’s FED meeting it was incapable of sparking a reaction the zloty.
The heat could be back on the zloty today if the FED hikes rates more than the expected 25 bps. or signals that more tightening lies in store in the US. Recent EUR/PLN highs (4.11-4.12 EUR/PLN) should provide strong support for the zloty though. Otherwise, if the FOMC sounds soft we could see a temporary rebound to the 4.00 EUR/PLN area on Friday.
(CSOB - Investment research)