Central European Daily

A much worse-than-expected US payrolls report was the event of the day on Friday. US payrolls in December came out surprisingly weak, as they showed the slowest pace of jobs creation since January 2011. While the Czech koruna remained more or less stable after the release, both the forint and the zloty in particular strengthened on bets on a pause in Fed’s QE tapering. As a consequence, the Polish currency hit this year’s high and was trading even below EUR/PLN 4.15 later in the afternoon. Nevertheless, bearing in mind that one-off factors might have been in play in the US in December (the Labor Department spoke about the very cold winter, that had kept more than a quarter million Americans from work), we would not overestimate either forint’s or zloty’s recent gains, although we continue to favor the zloty over medium-term, especially in pair with the Czech koruna.