Currency report: Złoty strengthens

Polish markets shrugged off data on Thursday that showed Polish inflation rose to 1.7 percent in January and that wage growth eased to 7.8 percent last month. According to the minority hawkish faction in the Monetary Policy Council, Poland's central bank should tighten monetary policy to counteract rising inflation pressures in the economy. Few economists expect any rate hike before April and some of them see the rate level remaining steady at 4.00 percent for the rest of this year.

On the international market the US dollar lost against the euro and especially the yen because of soft data on US manufacturing and inflation as well as remarks from Federal Reserve Chairman Ben Bernanke about easing inflation pressures. On Friday the USD/JPY fell to 119 yen - a one-month low - after data showing a slide in US housing starts further advanced the view that the Federal Reserve may have to cut interest rates this year.

Marek Węgrzanowski

X-Trade Brokers Dom Maklerski SA