EUR/PLN to trend lower towards 4.40 by year-end – ING
|In the near-term, the EUR/PLN pair is set to temporarily range bound. But looking ahead, zloty is expected to strengthen, sending EUR/PLN towards the 4.40 level in the last quarter of the year, according to economists at ING.
Fourth pandemic in Poland to be relatively benign
“The zloty is already close to significant undervaluation, so upside EUR/PLN potential is limited (4.60-63).
“Unlike other CEE central banks, NBP is yet to start the tightening cycle, so EUR/PLN should find solid short-term support around 4.54.”
“EUR/PLN should trend towards 4.40 in 4Q21 at the latest.”
“The MPC is gearing towards rate hikes, as elevated CPI proves more persistent than they expected. Moreover, the impact of the fourth pandemic in Poland, a major MPC concern, should be relatively benign.”
“Local industry is diversified and less exposed to supply chain disruptions. Also, the solid vaccination rate (close to the EU average) should prevent meaningful restrictions.”
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