The Polish zloty has weakened recently. Economists at Danske Bank expect the EUR/PLN to advance nicely towards the 5 level over the coming months.

Narodowy Bank Polski unlikely to become a lot more hawkish

“As we think that geopolitical risk may remain at current levels or even escalate further that will keep EUR/PLN at the current elevated levels or even higher, especially near-term. Furthermore, we think it is unlikely that NBP will suddenly become a lot more hawkish given the week state of the economy.”

“The joker is whether the Fed will change to a softer stance over the next 12M, but our base-case is not. Hence, we raise our forecast for EUR/PLN to 4.92 on 1M and 4.94 on 3M and then grinding slowly higher to 4.96 on a 6M horizon and further up to 5.00 in 12M.”