Zloty Extends Losses, EUR/PLN Flirts With 200-DMA

EUR/PLN keeps creeping higher after taking out the psychologically significant 4.35 figure. The zloty is the worst CE3 performer, albeit all three regional currencies underperform the euro. The pair last changes hands +210 pips at 4.3690, with bulls setting their sights on the nearby 200-DMA (4.3711) and Apr 16 high of 4.3728. Bears initially look for a pullback towards Jun 6 low of 4.2727.

• The wage-inflation dynamics are under the microscope, following yesterday's adoption of preliminary minimum/public-sector wage parameters for 2025 and the release of final CPI data for May this morning.
  • The government opted for a slightly higher minimum wage hike than initially proposed but left the public-sector wage hike at the projected rate of inflation. These figures are still subject to negotiations, with the government facing a September 15 deadline to gazette the decisions.
  • Headline inflation for May was confirmed at +2.5% Y/Y, which is in line with the NBP's target, but is still expected to accelerate. Local sell-side desks estimate that core may have slowed to around +3.7%-3.8% Y/Y from +4.1% prior.
• NBP's Ireneusz Dabrowski pointed to early 2025 as a possible timing of monetary easing in Poland. The official said that interest rate cuts this year are highly unlikely.
• POLGBs are marginally mixed at typing; the WIG20 Index is little changed.