EUR/PLN to break above 4.65 due to an ultra-dovish NBP – TDS
Central bank in Poland will, in the view of economists at TD Securities, remain dovish, with not even a single hike likely this year. Therefore, the zloty is likely to remain under pressure.
NBP thinks that it would be too risky to raise rates at this point
“We do not expect any rate hikes this year but do think that the NBP will announce the tapering of its QE program before the end of the year, most likely at the November meeting, which is a core one. Even against this scenario, we do not expect tightening before July 2022.”
“In the short-to-medium term, as the NBP remains ultra-dovish, we see EUR/PLN breaking above 4.60, with the potential to breach 4.65.”
“However, as the NBP starts the process of policy normalization next year, we see the zloty gradually converging back towards the pre-pandemic level of 4.30.”
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FXStreet Insights Team
FXStreet
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