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POLAND: Zloty Extends Upswing Amid Single Currency Strength

POLAND
  • The Euro continues to trade on the front foot to start the week, shrugging off the weak German IFO data. EURUSD (+0.35%) has reestablished itself comfortably back above 1.0700, erasing the PMI induced weakness from late last week and this bid appears to be lending support to CE3 FX, and in particular, the Polish Zloty.
  • EURPLN (-0.55%) hovers just above 4.3000, as the unwinding of the pair's recent upswing continues, and as noted spot is now below both the 20-day EMA (4.3179) and the 50-day EMA (4.3079). The next support for the pair comes in at 4.2791, 76.4% of the May 28 - Jun 14 rally.
  • We noted earlier that 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.
  • Markets will inevitably turn their focus to Friday’s preliminary read of June inflation. Elsewhere, President Duda is in Beijing for top-level talks with Chinese leaders and is expected to try and present trade and security as closely interrelated issues. 

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