Zloty Underperforms In CE3 Space Amid NBP Musings

EUR/PLN has edged higher today, struggling to find any catalyst that would give the pair fresh directionality. When this is being typed, it trades +41 pips at 4.4731, with the zloty lagging behind both its CE3 peers. Familiar technical picture remains in play.

• PLN/CZK trades at 5.3859, down 88 pips on the session. Bears look for a move through the nearby 50-DMA at 5.3750 and Aug 2 low of 5.3652. A clean break below these levels would signal potential for further losses. On the topside, bulls look for a resumption of gains towards Aug 7 high/round figure of 5.4925/5.5000.
• The zloty's relative underperformance might be linked to the dovish reception of yesterday's macroeconomic data (flash Q2 GDP, July core CPI), with some local desks suggesting that the NBP might cut rates earlier than expected. Poland's FRA contracts have crept higher today, amid higher global yields, but their uptick over the past month or so has been limited relative to the move in Czech FRAs.
• Poland's mainstream opposition parties (i.e. excluding the far-right Confederation) finalised their pact to jointly contest the upcoming Senate election. The agreement should allow the opposition to maintain control over the upper house. However, the key battle will be for the more powerful lower house, where the outlook remains highly uncertain.