Currency report: Belka resign and Złoty
In the light of positive sentiment from the USD, the zloty weakened to its lowest level since November 2004. The złoty's losses deepened after higher-than-expected U.S. inflation boosted expectations of steeper Federal Reserve rate increases, weakening emerging markets across the board.
The Polish currency lost almost 12 grosze to the euro (peaking at 4.31) and more than 14 grosze (reaching 3.34) to greenback. This unexpected depreciation has split analysts over, how the zloty will perform this year, with some expecting further weakness due to the expected start of a rate-easing cycle in Poland and political risk around a general election due within months.
The last few days resolved the riddle. Within five days the złoty returned to previous levels. EUR/PLN reached 4.14 and the USD/PLN stood at 3.15 on Friday afternoon. Political uncertainty didn't play a key role in the złoty show. As expected, Prime Minister Marek Belka resigned Friday and undermine the złoty slightly.
There will be regional political concerns ahead of the French EU referendum vote on the constitution.
Marcin Golik
WGI Dom Maklerski
The Polish currency lost almost 12 grosze to the euro (peaking at 4.31) and more than 14 grosze (reaching 3.34) to greenback. This unexpected depreciation has split analysts over, how the zloty will perform this year, with some expecting further weakness due to the expected start of a rate-easing cycle in Poland and political risk around a general election due within months.
The last few days resolved the riddle. Within five days the złoty returned to previous levels. EUR/PLN reached 4.14 and the USD/PLN stood at 3.15 on Friday afternoon. Political uncertainty didn't play a key role in the złoty show. As expected, Prime Minister Marek Belka resigned Friday and undermine the złoty slightly.
There will be regional political concerns ahead of the French EU referendum vote on the constitution.
Marcin Golik
WGI Dom Maklerski
