PLN: EUR/PLN Fails To Break Below 4.25, Keeps Hovering Above That Level

The latest sell-off in EUR/PLN was stopped around the 4.25 mark, similarly to mid-May, with bears struggling to force a breach of that psychologically relevant level. The rate last sits at 4.2586, down 24 pips on the session, with bears looking for a move through Jul 10/May 28 lows of 4.2482/71. Conversely, bulls look for a rebound above Jul 2 high of 4.3321.

• ING write that some investors may have been taking profit after a significant dip in USD/PLN, preventing EUR/PLN from breaching 4.25. They still expect EUR/PLN to move through that level within the next week or two, before approaching 4.22 this summer.
• Slightly softer than expected US CPI data yesterday cemented expectations that the Fed could start cutting rates from September. By contrast, the NBP is expected to leave rates on hold in the coming quarters, with Governor Glapinski playing down the odds of pre-2026 easing, even as several of his colleagues flagged the potential for cuts in 2025.
• The 2-Year/10-Year POLGB yield spread has been tightening this month, moving away from cyclical wides printed two weeks ago. The curve has bull flattened further today, with yields last seen 0.1-2.4bp shy of neutral levels. 6x9 FRA contracts last trade around 16bp below 3-Month WIBOR.
• The WIG20 Index has added 0.4% this morning, printing new weekly highs.