Zloty Falters Amid PLN/HUF Sales, President Duda Calls Cabinet Council Meeting

The zloty gives away its earlier gains, with EUR/PLN swinging into a gain, as President Andrzej Duda finished his speech, even as it did not contain any fresh combative remarks towards the government. The pair last deals +89 pips at 4.3386 and the zloty moves lower in the EMEA currency scoreboard, although it still outperforms the CZK, RUB and ISK. Note that the upswing in EUR/PLN coincided with a sharp sell-off in PLN/HUF in reaction to the news that Hungary reached a deal with the rest of EU member states on unlocking a EUR50bn aid package for Ukraine.

• Duda's address was surprisingly conciliatory, with the head of state noting that he signed the budget bill and is happy that the government will now be able to implement its agenda. He did not make any references to the fact that he sent the bill to the Constitutional Tribunal or to his earlier threats that he might do the same with other bills adopted by this parliament. His speech was largely devoted to a decision to invite the Cabinet for a meeting on infrastructure and modernisation projects, which in his view would boost Poland's security and economic performance.
• Around the same time, Prime Minister Donald Tusk expressed satisfaction with the President's decision to sign the budget bill instead of trying to force the coalition to push for a snap election.
• Note that HSBC yesterday recommended selling the PLN against the HUF on the back of their view that Hungary's balance of payment dynamics are more favourable.