Apart from the slightly higher volatility the
zloty’s behavior on Thursday was little
different from what we have seen over the
last several days. The unit inched down to
3.92 EUR/PLN in the first hours of trade, but
the move ran out of steam before noon as it
became clear the lower house of parliament
would postpone the planned dissolution
votes till late next week. Buyers got the
upper hand once again as emerging market
sentiment improved over time and the
EUR/PLN gradually inched higher only to
break past the 3.90 support and test the
3.89 level in offshore trade.
The EUR/PLN pair should stick to the 3.89-
3.92 technical range. With the coalition deal
closer than ever and a large portion of the
political uncertainty wiped away, we would
expect the pair to stay closer to its lower
bound. Data-wise the session is rich, but
neither of the figures is set to be a real
market mover. Our CPI estimate is not far
off from the market consensus, so we would
not expect much reaction from the zloty on
the release. Due to the recent correction the
same applies to the August C/A deficit, even
though we believe it will come in above the
market estimate.
(CSOB - Investment research)