EUR/PLN likely to rise around 4.35 over coming months, says Commerzbank

The EUR/PLN currency pair is expected to rise around 4.35 mark over the coming months, following weaker-than-expected actual investment performance than what could be explained by EU funds. And contrary to expectations, household consumption has not been boosted much by the Family 500+ subsidy scheme.

The zloty weakened yesterday, underperforming the likes of the forint, as the Polish PMI for October fell sharply, from 52.2 to 50.2. The decline was prominent because most other PMIs from around the CEE region, even countries enjoying slower manufacturing growth than Poland, had risen in October.

The fall of the Polish PMI is actually consistent with recent manufacturing and other data, based on which consensus GDP growth forecasts had been steadily downgraded. The 3.1 percent growth forecast for this year is no longer sub-consensus, reported Commerzbank.

Meanwhile, in this context, Deputy Development Minister Jerzy Kwiecinski tried to send out an optimistic message, reminding markets that EU fund flow will pick up in 2017, and investment growth would recover.