EUR/PLN touched its lowest levels since early 2021 on Tuesday. We remain positive on the Zloty, however, as we estimate that positioning must be extremely long at the moment – most significantly in the CEE region. Moreover, we can expect a dovish report from the NBP on Thursday.

The market has priced in a lot of rate cuts for this year over the past week without significant damage to the PLE. Thus, the current account surplus, strong FDI flows and the dampening of volatility through MinFin operations in the market will continue to support the Zloty, but we expect further gains to be at a slower pace.