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PLN Weakness Increases Speculation Over a 100bps NBP Response

POLAND
  • NBP is meeting on July 7 and a 75bps hike is on play for Thursday.
  • Risks may be skewed to the upside slightly but the board has recently mentioned that it was not in favor of maintaining its 'sharp' 100bps+ hike stance.
  • Base case: 75bps hike, 25% probability of 100bps hike, which may lead to some (little) PLN appreciation, and a 5% probability of 50bps hike as lower than 75bps would emphasize PLN weakness.
  • EURPLN broke above its 4.7450 resistance today and is currently trading at its highest level since March 25.
  • Next resistance to watch on the topside stands at 4.8030, which corresponds to the 38.2% Fibo retracement of the 4.4830 - 5.0020 range.

Source: Bloomberg/MNI

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