Further Gains Ahead For The Zloty

Although the Polish zloty has weakened in recent days to PLN3.8935/EUR on April 19 (with the Europe-wide air travel disruptions, Greece's fiscal woes and allegations of fraud at Goldman Sachs all playing a role), we are confident that the appreciatory trend remains in play. To be sure, while market momentum may see the unit retest support at PLN3.9500/EUR, this would likely hold given that Poland's favourable macroeconomic fundamentals and risk profile do not justify a marked sell off in our view. As such, for the time being we still expect the broad uptrend which has held since Q109 to continue going forward, with our PLN3.7000/EUR upside target still in play.

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