Zloty Little Changed, Activity Data Due Tomorrow

EUR/PLN has weakened past 4.26 yesterday but support from 4.25 remained intact. The rate changes hands at 4.2542, little changed on the day, with bulls looking for recovery past the 50-EMA at 4.3008. Conversely, bears keep an eye on the nearby round figure of 4.2500. A clean break here would open up 4.2131, the 1.00 projection of the Jan 17 - Apr 9 - Apr 16 price swing.

• Citing official data, Citi Handlowy write that out of the equivalent of EUR20bn in foreign currencies, the Finance Ministry last year exchanged EUR15.5bn via the NBP and EUR4.5bn in the market. This means that the rate of conversion through the NBP rose to 78% from 58% in 2022. Based on partial data for this year, Citi estimate that the total volume of conversions has notably declined, while the Finance Ministry's FX holdings rose to EUR22.4bn now from EUR9.9bn at the end of 2023.
• NBP's Ludwik Kotecki said that a stabilisation of interest rates through the end of the year is an "optimistic" but "perhaps "perhaps also most likely" scenario, although a small rate cut cannot be ruled out if wage pressures subside. For now, according to Kotecki, the current pace of wage growth is inconsistent with the NBP's inflation target.
• POLGB yields sit slightly lower across the curve. Worth adding that PLN 6x9 FRAs have been ticking lower over the past week or so.
• The WIG20 Index has moved away from fresh cyclical highs printed yesterday around 2,600 but the broader uptrend remains intact.
• Polish economic activity data for April will start trickling through tomorrow.