Currency report: Calmer in Central Europe

On Friday afternoon the euro cost only zł.3.92 and the US dollar zł.3.11, versus zł.3.97 and zł.3.12 on Monday.

The złoty gained as investors in the US started to speculate about rate cuts next year, after weaker than expected ISM data and Ben Bernanke's speech. The złoty was also supported by a rumor that Poland's Finance Ministry sold euros and dollars against the złoty on the market, which the Ministry denied. Self-defense and the Peasants' Party signaled also that they would like to avoid early parliamentary elections.

The złoty is still supported by good economic data, the Labor Ministry announced that the unemployment rate fell to 15.3 percent in September from 15.5 percent in August. Finance Minister Zyta Gilowska also pointed out in a lecture that the currency should continue to gain steadily due to large inflows of European Union funds.

On the international market the dollar clearly gained after payroll data. The dollar hit six-month highs against the yen and three-months highs against euro on Friday, after a report showed sharp upward revisions to US jobs growth.

Marek Węgrzanowski

X-Trade Brokers Dom Maklerski SA