The Polish zloty fell victim to gentle profit
taking on Wednesday ahead of the MPC
rate decision announcement, which brought
the EUR/PLN pair into the 3.89 area at the
end of trade. The Council’s decision to keep
rates unchanged was broadly in-line with the
consensus and the afternoon statement
came in a bit more on the hawkish side than
in September due to the less favorable
inflation path envisaged in the inflation
projection, something also fully expected.
Both were hence non-events for the zloty.
We could see some more profit
taking early today as the market digests the
MPC decisions and unless bonds move
significantly higher a move closer to 3.90 is
not out of the question. We should see
strong technical resistance at this point.
The most important data from the new
inflation projection were already released
yesterday, so the publication of the inflation
projection today will be of lesser or no
importance to the zloty. In this case all
should once again be up to the regional
sentiment for the zloty.
ČSOB Investment Research