Currency report: Higher US yields hit złoty

The złoty extended losses against the euro by just over 0.5 percent in early trade on Wednesday as the already-shaky sentiment toward emerging markets was undermined by Tuesday's Fed rate hike and statement. However, before the end of the day most Central European currencies managed to regain the earlier losses and the złoty was no exception. After hitting a day high at zł.3.975, the EUR/PLN inched down to the zł.3.95 range later in the session and eventually ended the day slightly lower. With the vote on the dissolution of the Sejm just days away and the prospect of general elections in Hungary late next week, I expect it to be difficult for the złoty to strengthen beyond the zł.3.95-zł.4.00 EUR/PLN range in the coming days.

The end of both the month and quarter caused high volatility on Friday, making the technical picture unclear.

Maciej Chojnacki,
WGI Dom Maklerski