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NBP ‘Dovish’ Hike Levitates EURPLN Higher

POLAND
  • Yesterday, the NBP disappointed market and hiked its policy rate by 75bps to 5.25% (vs. 100bps exp.) despite the strong ‘surprise’ in inflation in April.
  • The ‘dovish’ hike has led to some PLN weakness, with EURPLN current testing its 50DMA resistance at 4.70.
  • A break above that level would open the door for a move up to 4.7280.
  • NBP reiterated in its statement that future decisions on rate hikes will depend on Ukraine situation and economic data (inflation).
  • The central bank will act to ensure price stability and may also intervene in the FX market if needed.
  • Further price action could be seen today during Governor Glapinski press conference (3pm CET).
  • NBP will publish the minutes of its April meeting at 2pm (CET).

Source: Bloomberg/MNI

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