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Global Risk Off Leaves PLN Vulnerable Despite NBP Hike

POLAND
  • Yesterday, the NBP surprised the market and hiked its policy rate by 100bps to 4.5%, its highest level since November 2012.
  • Even though the hawkish hike generated a ST rally on PLN in the beginning, global risk off environment has left CEE currencies vulnerable this week.
  • EURPLN reached a 1W high at 4.6660 yesterday, before consolidating lower this morning.
    • ST support to watch on the downside stands at 4.6270 (100DMA).
    • On the topside, resistance to watch above 4.6660 stands at 4.70.
  • In its statement, the NBP mentioned that rate hikes will curb inflation expectations and that the central bank will continue to act to ensure price stability.

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