Currency report: Złoty holds steady

The currency and bonds held steady on Thursday, as investors awaited the release of retail sales, unemployment, and core inflation data which were due to come out on Friday. Inflation came in slightly lower than expected, at 1.6 percent, inching up a tenth of a percent from January. There was also good news on the retail-sales (surging 17.5 percent y-o-y) and unemployment (14.9 percent - lower than forecast) fronts. However, the złoty still held stable, as investors took the good figures as a possible sign that the Monetary Policy Council (RPP) could raise interest rates at its meeting next week.

"This figure is adding more evidence that inflation pressure is building," said Monika Kurtek, an economist at Bank BPH in Warsaw. "It should be taken as a warning sign by the central bank rate-setting council. However, we don't expect these figures to convince them to move at the upcoming meeting and the rates will be kept unchanged." she predicted.

The złoty's stagnation frustrated some traders. "We need something to push us out of this magic range of 3.85 and 3.95 [against the euro]," said one Warsaw-based dealer. (Reuters)