The zloty may continue to depreciate. USD / PLN at 3,93, EUR / PLN at 4,61

The zloty started the day with a slight strengthening, after yesterday strongly depreciated on the wave of global fears bankruptcy of the Chinese developer Evergrande, but quite quickly today “market fears” came to the vote and despite slightly better moods and good data from the Polish economy, the zloty is slightly depreciating. And this is not the end of his problems.

At 10:26 AM the EUR / PLN exchange rate was at the level of PLN 4,6081, after it rose to PLN 4,60 at the end of the day, breaking the local peak from July. The euro is currently the most expensive in six months.

At the same time, the USD / PLN rate tested the level of PLN 3,9290, rising by 0,7 groszy in relation to Monday's close and preparing to attack the August maximum (PLN 3,9359).

EUR / PLN daily chart

EUR / PLN daily chart. Source: Tickmill

Domestic investors, focusing on global factors, completely ignored the data from the Polish economy published in the morning by the Central Statistical Office. And these, unlike the last few reports, were a positive surprise. Retail sales in August increased by 10,7%. year on year, exceeding market forecasts by 10 percent. Construction and assembly production jumped by 10,2 percent in the same month. on an annual basis, while the market consensus was at the level of 7,5%.

This lack of zloty reaction to the data from the Polish economy should worry investors, as it is expected in the afternoon interest rate increase in Hungary, will increase the disparity in their level between the two countries, which will have a negative impact on the sentiment towards the Polish currency.

Regardless of today's session on the domestic FX market, the tough days for the zloty are not over. Currently, most of the factors indicate its further weakening. Starting from the increase in risk aversion in the world markets, through the reluctance of the Monetary Policy Council to react to the highest in two decades and the highest in the European Union inflation in Poland, the risk of suspending the payment of European funds to Poland, and ending with the recent very weak data on the balance of payments.

The possible further weakening of the zloty is also indicated by the balance of forces on the EUR / PLN daily chart. Breaking above the peak in July almost automatically opens the way towards PLN 4,66-4,67. Undoubtedly, a further deterioration in sentiment in the financial markets and a possible announcement of a tapering by the US Federal Reserve tomorrow, such a move would accelerate.