Currency report: Złoty a touch

"The złoty opened weaker today after falls on Asian stock markets and worsening of emerging-markets sentiment after higher PPI data in the United States and a downgrade of Iceland's rating," Bank Zachodni WBK wrote Friday morning. The EUR/PLN ended the day at zł.3.89.

Shares in Tokyo dropped, which fueled jitters about a further unwinding of carry trades, in which investors borrow low-yield currencies, such as the yen to buy higher-yielding ones.

Concerns about the future of the US mortgage and housing markets also rattled financial markets last week, taking its toll on emerging-market currencies.

Investors in Poland are closely watching data for signals as to which way the Monetary Policy Council (RPP) could go when it meets to decide on interest rates at the end of the month. NBP policymaker Andrzej Wojtyna said last Thursday that there was a greater chance of a rise in interest rates in H1 this year.

Following Wojtyna's comments, bond prices inched lower as investors priced in the higher chance of monetary tightening, but were stable on Friday. The RPP has held interest rates flat since February last year, as inflation remained well below the central bank's target. (Reuters)