Worse than expected CA balance weighed on the zloty
US debt stalemate may undermine regional currencies
The Polish zloty retreated from a three-week high on Friday following the release of current account (CA) figures for August. CA balance reached – 719 million euro while markets on average expected a milder deficit of 213 million. A wide gap between income account´s revenues and expenditures (-1 738 million euro) was a major surprise reflecting ongoing strong outflow of dividends from Poland. Although the high income deficit may prove to be a one-off event in retrospective and partial compensation of lower dividends outflow in July (see the chart), it easily surpassed August´s services and goods surplus of 779 million. Although the zloty weakened right after the release, its losses remained limited. The EUR/PLN pair stayed well below a resistance at 4.20 to eventually close barely changed.
Read the full report: FX Daily
KBC
