The Polish zloty moved slightly higher at
the opening but in the end held to a tight
range on Tuesday as markets took their time
to assess details regarding the 2007 budget
draft. The data came out unofficially on
Monday and were only confirmed by the
government yesterday, hence the
information had no visible impact on the
market.
After an unsuccessful attack on
3.95 the EUR/PLN pair headed back to
3.96 but nonetheless ended the day slightly
in the green along with other CE4 markets.
Zyta Gilowska’s vetting trial ends today and
could get some attention from markets, as
the ex-FinMin is expected to be cleared of all
charges. Gilowska has not yet decided
whether she will return to the government
after the trial, which led to her dismissal
earlier this year ends.
Nonetheless markets
hope that she will, and should greet a
positive verdict warmly. In the meantime the
fairly calm budget proceedings have failed to
provide the zloty with visible upside since
there are still too many variables missing
from the equation (regarding taxes, the
amount of additional social spending) to give
a clear picture of next years’ fiscal outlook.
With the final government decision on the
budget still roughly two week’s away we
should see more range trade on the
3.95-3.9750 EUR/PLN today.
(CSOB - Investment research)