Currency report: Euro above zł.3.90

A sell-off on the debt market brought Polish 10-year T-bond yields to the level of 4.9 percent. More falls are seen for the coming days and investors are watching both international interest rates and the domestic political situation. The latter brought some positives however, as the so-called stabilization pact is still alive and the government should not be dissolved soon. The Pekao SA-BPH merger case brought current NBP head Leszek Balcerowicz under attack from the leader of the right-wing League of Polish Families, Roman Giertych, the leader of Self-defense, Andrzej Lepper, and governing PiS' leaders. International investors are watching these events with patience but that could end if Balcerowicz is seriously attacked by the current government and President.

The euro gained 2.5 percent this week and broke through resistance at zł.3.86 and then zł.3.90. The sentiment for złoty is very weak and the currency should lose in the coming days and weeks. The next target is the psychological barrier of zł.4 on EUR/PLN.

Maciej Chojnacki

WGI Dom Maklerski