Another day of the zloty discount, the Bank of Hungary hurt him

Thursday was another day of significant zloty depreciation, which was additionally hurt ... National Bank of Hungaryby unexpectedly raising interest rates.

The zloty has been weakening since the beginning of September, but this week the process clearly accelerated. The reason for the sell-off of the Polish currency in recent days, as is the case with many other currencies, is the return of fear of the coronavirus pandemic. Including fears of new mass lockdowns, which the markets completely ruled out a few weeks ago. This fear is quite real when you look at the rising statistics of new infections. Also in Poland, where a record 1136 new cases were reported today.

The zloty is losing strongly

The pandemic is not the only reason for the weakening of the zloty. The second was a turn EUR / USD from 1,20, bringing the pair to $ 1,1627 today. Another reason, but of less importance, was the incoming data from all over (including Poland) suggesting a slowdown in the economic recovery.

On Thursday, the markets got one more argument to sell the zloty. Namely, unexpected interest rate hike in Hungary. Unexpected, as the central bank raised them two days after the regular meeting at which rates did not change. Today, however, he came to the conclusion that it should have been done and decided to raise the cost of money by 15 basis points. As a result, the main rate increased to 0,75 percent.

The rate hike provoked the strengthening of the Hungarian forint. It is real that part of the speculative capital flowed to Hungary from Poland, which was felt by the zloty. And this flow may still take place in the future. Today's move by the Bank of Hungary naturally opens up speculation on the next rate hike.

EUR / PLN analyzes

The balance of forces on the EUR / PLN daily chart, after the rate broke above PLN 4,50, indicates a clear dominance of buyers. Especially that this is yet another demand signal. The nearest resistance is around PLN 4,5720 and this is the target for buyers. And this is the maximum demand for now. At the moment, a return to the March highs still seems unlikely.

EUR / PLN chart, D1 interval. Source: MT4 Tickmill.

USD / PLN analyzes

The resistance was also broken by the USD / PLN exchange rate, breaking above 3,90 PLN. This automatically opens the way to PLN 4. However, the chances of such an attack are slim. At best, the demand side will lead to an attack on PLN 3,97. It will be possible when the euro becomes more expensive to PLN 4,57, and at the same time the EUR / USD exchange rate drops to 1,15. In both cases, these are extreme scenarios. Hence the above lack of faith in the possibility of testing the dollar by PLN 4.

Chart USD / PLN, D1 interval. Source: MT4 Tickmill.