PiS is losing power, the zloty is clearly strengthening

The zloty clearly strengthened in reaction to the preliminary results of the parliamentary elections in Poland. On Monday morning, the main currencies dropped by approximately PLN 7 compared to Friday's closing.

PiS loses power, the zloty reacts by strengthening

On Sundays parliamentary elections in Poland, according to the published late poll, the Law and Justice party, which has been in power for 8 years, won, but due to the lack of any coalition abilities, it will most likely lose power to the opposition parties under the aegis of the Civic Coalition.

According to late poll results, Law and Justice won 36,6 percent in the elections. votes, Civic Coalition 31 percent, Third Road 13,5 percent, New Left 8,6 percent, and Confederation 6,4 percent. This means that the opposition coalition consisting of the Civic Coalition, Third Way and New Left can count on a total of 248 seats in the new Sejm (the majority is 231 seats).

The zloty reacted with a significant strengthening against the main currencies to the change of power in Poland. At 08:08 the euro fell to PLN 4,4640 from PLN 4,5330 on Friday at the end of the day, i.e. by as much as PLN 6,9. As a result, the EUR/PLN exchange rate was at the lowest levels since the beginning of September, i.e. since the Monetary Policy Council (MPC) surprised everyone and decided to "electorally" reduce interest rates by as much as 75 basis points.

EUR / PLN daily chart. Source: Tickmill

In reaction to the election results in Poland, the dollar fell this morning by 7,2 groszy to PLN 4,24, the Swiss franc fell by 7,8 groszy to PLN 4,7030, and the British pound fell by 7,6 groszy to PLN 5,1580 since Friday. ,PLN XNUMX.

The zloty began to slowly discount the change of power in Poland over a week earlier. This is understandable behavior. The takeover of power by the opposition may not only improve Poland's image in the eyes of foreign investors, but also gives hope for the quick unblocking of the National Reconstruction Plan (KPO), and in the opinion of many market participants, it may limit the willingness of the Monetary Policy Council to reduce interest rates next year.

The election results should also have a positive impact on other Polish assets. Including the prices of shares of companies listed on the Warsaw Stock Exchange.