Strong Zloty could drive EUR/PLN to 4.22 – Danske Bank
|Jakob Christensen, Head of EM Research at Danske Bank, believes the Polish Zloty could pick up pace in the longer run, driving the cross to the 4.22 area.
Key Quotes
“The zloty has rallied strongly following the Brexit result, mirroring a wider emerging market rally”.
“Furthermore, policy uncertainty has reduced since the president’s office presented a revised plan on conversion of Swiss franc loans, seen as less radical vis-à-vis banks”.
“However, we see some temporary weakness on a 1M and 3M basis compared with spot given the ongoing stand-off with the EU, 2017 budget discussions and possible renewed EU-related Brexit concerns”.
“We expect EUR/PLN to increase to 4.30 in 1-3M. However, given the robust performance of the Polish economy and possible falling risk premium from a resolution of the stand-off with the EU, we expect EUR/PLN to fall to 4.28 in 6M and 4.22 in 12M”.
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