With the regional sentiment evidently bullish,
the Polish coalition deal closer than ever and
a large portion of the political uncertainty
wiped away the zloty kept its strong
composure and hovered near the lower
bound of the 3.89-3.92 EUR/PLN range
through most of Friday’s session. On the
data front the inflation numbers and the C/A
data were the highlight of the session (more
in the fixed income part) but were both
basically ignored by the market. Just before
the closing the pair inched even higher and
into the 3.87 area on the back of the
strengthening forint and pre-weekend
position squaring.
The market seems to have priced in the
revival of the PiS-SD-LPR coalition already,
so despite the strong sentiment any bad
news regarding the deal could may lead to
some short term profit taking today.
Otherwise the zloty should stick to range
trade until the majority agreement is signed
in the Sejm (which is our base scenario)
later today or tomorrow.
(CSOB - Investment research)