EUR/PLN: DOVISH NBP SHOULD NOT PUSH ZLOTY TO WEAKER LEVELS – ING

The main event on the calendar in the CEE region is the meeting of the National Bank of Poland. Economists at ING analyze the monetary policy decision and its implications for the Zloty.

EUR/PLN to see some stabilisation around 4.460 

We expect rates to remain unchanged and the main focus will be on the new forecast and Friday's press conference. Both can be expected to be dovish in tone. The market has moved significantly in that direction over the past two weeks and is pricing in roughly 100 bps of rate cuts by year-end at this point. Thus, the news from the NBP should not come as a surprise to the market though pressure to price in even more rate cuts could be expected.

In the case of PLN, despite the dovish NBP, we should not see much pressure for further weakness on the day but rather some stabilisation around 4.460 EUR/PLN.