In the near-term, the EUR/PLN pair is defined to temporarily range bound. But looking ahead, zloty is likely to strengthen, sending EUR/PLN towards the 4.40 level within the last quarter of the year, in accordance with economists at ING.
Fourth pandemic in Poland to be relatively benign
“The zloty has already been near to significant undervaluation, so upside EUR/PLN potential is limited (4.60-63).
“Unlike other CEE central banks, NBP is yet to start the tightening cycle, so EUR/PLN should find solid short-term support around 4.54.”
“EUR/PLN should trend towards 4.40 in 4Q21 at the latest.”
“The MPC is gearing towards rate hikes, as elevated CPI proves more persistent than they expected. Moreover, the impact of the fourth pandemic in Poland, a major MPC concern, should really be relatively benign.”
“Local industry is diversified and less exposed to produce chain disruptions. Also, the solid vaccination rate (close to the EU average) should prevent meaningful restrictions.”
