Zloty Garners Strength Amid Dissonance Within NBP

EUR/PLN resumes losses today after catching a breather on Friday, with the zloty drawing some support from well-documented domestic factors as well as wider greenback weakness. The pair last deals at 4.3693, down 195 pips on the session. Technically, Mar 12, 2020 low of 4.3237 provides the initial bearish target. Bulls look for a rebound above the 20-EMA at 4.4319.

• MPC's Ludwik Kotecki told DGP that the inflation target will only be approached at end-2025 and reached in 2026, due to the recent rate cuts. His colleague Ireneusz Dabrowski disagreed, telling TVN24 that inflation could return to the target by the end of 2024. Meanwhile, Kotecki expressed hope that the NBP will stand pat on rates at least until March, at which point there will be more clarity on the plans of the incoming coalition government.
• Santander expect EUR/PLN to remain within the 4.25-4.45 range for now, likely staying below 4.40 for longer, with exporter pain limiting the downside. ING expect the rate to finish the year close to 4.40 and see exporters' pain threshold within the 4.30-4.40 range.