Will the CSO hit the zloty on Friday? [Inflation in Poland]

Disappointing data from the Polish economy may strike the back of the zloty, permanently pushing it to levels unobserved since autumn.

Polish zloty in defense

Thursday is marked by the weakening of the zloty against major currencies. The factor that pushed the dollar to almost 3,92 zlotys, as a result of which it is the most expensive since the end of November, is the recurrence of fear of the coronavirus epidemic and the drop in prices EUR / USD to 1,0850 (the lowest level since May 2017). At the same time, the euro exchange rate was rising, but at a much lower pace and with much smaller consequences. While in the case of USD / PLN the risk of an attack on resistance at 3,9327 PLN and subsequent further increases was high, the euro remained relatively stable.

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

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

Friday may bring a further discount on the zloty. This time, not due to worse moods in the global markets or decline in EUR / USD, but due to data from the domestic economy.

On Friday, the Central Statistical Office will publish January inflation data and preliminary estimates of economic growth in the fourth quarter of 2019. Inflation is expected to rise to 4,2% in January. from 3,4 percent Y / Y in December. Under normal circumstances, such price acceleration would provoke speculation about future interest rate increases by the Monetary Policy Council. However, not when growth is holding back. And it brakes. And that much. According to market estimates, GDP will fall to -0,1 percent on a quarterly basis. from +1,3% in the third quarter. Such or worse data will be like the proverbial stone around the neck.

Macroeconomic calendar. Source: macroNEXT