The Polish zloty extended last week’s gains
on Monday, as CE currencies continued to
rally ahead of the September Fed meeting
on Wednesday. The EUR/PLN pair got off
to a strong start of the session in the 3.94
area and headed south until gains were
capped at the technical level of 3.9250.
Given the amount of underlying risk
regarding politics and hence next year’s
fiscal perspectives the strong performance
from the Polish currency last week must have left many investors distressed ahead of
the budget showdown later this week, so
despite the extension to the rally trading was
anything but intense yesterday.
The August industrial output and PPI data
will be the highlight of the session today, but
since we expect both to come in roughly inline
with the market consensus estimate we
don’t see much room for reaction from the
zloty. Apart from the data and the allimportant
US decision on rates, Hungarian
politics and forint’s development should be
in focus. Given the expected weakening of
the forint, the zloty should ease too today.
ČSOB Investment Research