Currency report: Investors evacuate

Investors began to buy the złoty, pushing the EUR/PLN to its lowest level since June 2002. EUR/PLN broke the resistance on zł.3.87 but the złoty was unable to sustain the gains and EUR/PLN returned above that level.

After a steady Wednesday, Thursday brought a huge selloff on stocks and bonds in our region. The złoty, forint and Czech crown were also losing, suggesting capital outflow from emerging markets. Pure current-account deficits in Poland and central bank warning signals about next year's budget were not helping the złoty and the EUR/PLN easily reached zł.3.94 on Friday.

It was a week of steady gains for the dollar, with one of the most significant points being a break above 115 against the JPY, which was the highest level in 17 months. The greenback was also gaining versus the euro as investors count on further interest rate highs by the Fed on November 1.

Maciej Chojnacki, WGI Dom Maklerski