PLN: Zloty Gains Some Strength Despite Below-Forecast Data

EUR/PLN trades at 4.3179, 74 pips lower on the day, as the unwinding of the pair's recent upswing continues. The rate is testing support from its 20-EMA (4.3179) and a break here would open up the 50-EMA (4.3079). Conversely, a revound above Jun 14 high of 4.3826 would reinstate the short-term bullish theme.

• Data out of Poland's construction sector were worse than expected, with activity contained by high interest rates, a cyclical pause in the realisation of EU-funded projects, and calendar effects. Retail sales also missed expectations, but remained good enough, with several sell-side desks quoting the data as further evidence of a consumer-led economic recovery this year.
• POLGB yields are down 2.3bp-3.8bp across the curve, with some light steepening evident, even as CZGBs and HUGBs are slightly weaker on the session. The WIG20 Index has added 1.3%, printing its best levels in a month, albeit cyclical highs registered just above the 2,600 mark in May remain some way off.
• President Duda is in Beijing for top-level talks with Chinese leaders. The President's Chancellery said that the visit is divided into two parts, one devoted to bilatersl investment and trade relations and one devoted to security matters (including in Eastern Europe), although Duda is expected to try and present trade and security as closely interrelated issues.