After a spell of weakness in early trade,
which saw the EUR/PLN pair edge close to
the 4.0 EUR/PLN mark the Polish zloty
managed to recoup more than all of the
losses brought by the breakup of the
governing coalition on Friday.
The market seems to be looking at the bright side of the
situation (safe fiscal perspectives with Zyta
Gilowska back in office, Andrzej Lepper no
longer in the government, chances of a more
stable coalition and the fact that the possible
elections would not change much in the
political layout) and have hence coped
reasonably well with the volatile politics.
Nonetheless we do not see much room for
upside for the zloty until the political situation
is clarified, although Poland’s strong
economic fundamentals should help offset
the potential downside.
(CSOB - Investment research)