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NBP Speak & Post-Election Musings Keep EUR/PLN Below 4.40

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The release of below-forecast US CPI data yesterday applied further pressure to EUR/PLN, helping it extend post-election losses. The pair continues to lose altitude, trading -54 pips at 4.3932 as we type, after printing its worst levels since August 2020.

  • From the technical standpoint, the focus falls on 4.3711, which limited losses on Jun 3, 2020. On the flip side, a recovery past the 50-EMA/Oct 25 high at 4.4878/98 would give bulls some reprieve.
  • Poland's October inflation reading was revised to +6.6% Y/Y from the flash reading of +6.5%. Local sell-side desks estimate core inflation at around +8.0-8.1% Y/Y based on final CPI data.
  • NBP's Kochalski refused to rule out a scenario whereby interest rates would remain on hold for the entirety of 2024, which is at odds with current market pricing. This hawkish shift in rhetoric may have lent some support to the zloty.
  • Growing confidence that the incoming government could secure access to suspended EU funds seems to be another source of zloty strength, with Bloomberg reporting that some money could be unfrozen within weeks.
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The release of below-forecast US CPI data yesterday applied further pressure to EUR/PLN, helping it extend post-election losses. The pair continues to lose altitude, trading -54 pips at 4.3932 as we type, after printing its worst levels since August 2020.

  • From the technical standpoint, the focus falls on 4.3711, which limited losses on Jun 3, 2020. On the flip side, a recovery past the 50-EMA/Oct 25 high at 4.4878/98 would give bulls some reprieve.
  • Poland's October inflation reading was revised to +6.6% Y/Y from the flash reading of +6.5%. Local sell-side desks estimate core inflation at around +8.0-8.1% Y/Y based on final CPI data.
  • NBP's Kochalski refused to rule out a scenario whereby interest rates would remain on hold for the entirety of 2024, which is at odds with current market pricing. This hawkish shift in rhetoric may have lent some support to the zloty.
  • Growing confidence that the incoming government could secure access to suspended EU funds seems to be another source of zloty strength, with Bloomberg reporting that some money could be unfrozen within weeks.