Polish zloty fell on gentle profit taking

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