Market yesterday (including myself) were looking for a cut from Polish cb. As they did nothing, pln rallied sharply. However I think that Pln data of the last month has been quite a disaster (weak domestic demand and weak exports so in my view an explosive combination). I think they should cut soon and eur/pln should go back to 4.2000. On the other hand, for the last week, czk has been used as a funding currency for intra CE3 relative value trade so eur/czk went up sharply. Fundamentals are also weak in Czech but relatively better than Poland. Also relative hawkishness of Fed minutes yesterday should temper risk seeking environment. So as long as we stay below 6.35, We thing stay short pln/czk targeting a move back to 6.1800.
Natixis