EUR/PLN targets 4.14 short-term – Rabobank

FXStreet (Edinburgh) - In the opinion of Jane Foley, Senior Currency Strategist at Rabobank, the increasing bearish around the euro will eventually drag the cross back to December lows.

Key Quotes

“The December 4 low at 4.1494 is our short-term target for EUR/PLN followed by the 4.13~ level”.

“While the full-scale QE announced by the ECB in January will be the main source of downside pressure on EUR/PLN, the PLN is also supported by the relatively positive outlook for the Polish economy”.

“Given that substantial PLN appreciation would lead to an even longer period of deflation and might undermine prospects for exports, the MPC is likely to narrow the interest rate differential”.

“The MPC, however, can only slow down PLN trend vs EUR and is unlikely to reverse it”.