EUR/PLN expected to drop to 4.20 in the medium term – Danske Bank

Jakob Christensen, Chief Analyst at Danske Bank, now sees the cross dropping to the 4.20 region in a 6-month horizon.

Key Quotes

“The zloty has been hit harder recently than we expected by a combination of weakening emerging market sentiment, dovish NBP and renewed uncertainty about Polish/EU relations”.

“The EUR/PLN broke out of the 4.18-4.23 range. We think the EU uncertainty may fade over time and EM sentiment will improve and see a renewed PLN strength over time. As a result, we see the spot EUR/PLN rate falling to 4.24 and 4.20 over 1M and 3M (previously 4.20 and 4.18). We still expect the strong growth and rise in inflation to give support to the zloty and therefore target the EUR/PLN at 4.16 in 6M and 4.10 in 12M”.