The Polish zloty fell victim to position
squaring on Friday ahead of the US payroll
report and the upcoming long US weekend.
The softer bond market sentiment also
underpinned the corrective action and we
saw the unit shed roughly 0.5% against the
euro. The quick knee-jerk rise in the dollar
(after the US payrolls came in broadly in-line
with expectations) was pretty much ignored
by the market though as the global
repositioning and the fall in bond prices
which led the zloty past 3.95 and into the
3.96-3.9750 EUR/PLN area both ended
before the data were released.
Tensions remain elevated within the
governing coalition, as Andrzej Lepper
suggested over the weekend that continued
friction could lead to earlier elections early
next year. Samoobrona has not gone much
further with its pre-election campaign
rhetoric though and simply reiterated that it
would not back the budget in the current
form (which is still unknown to the broader
public). Politics remain unnerving and the
zloty is likely to stay under pressure in the
coming days.
The 4.00 EUR/PLN level
seems the obvious target at the moment and
we could see it under attack later this week.
Regarding today’s trading with the US
players off on leave we should see less
action and hence more range trade from the
unit at least until after Labor Day.
Zloty eases on domestic politics.
After the critical comments of Hungarian
central bankers concerning convergence
programme on Thursday sentiment in the
Hungarian market did not change on Friday.
(CSOB - Investment research)