Following the Russian invasion, EUR/PLN has seen huge swings first touching 5.0 but later falling back heavily to 4.68. Economists at Danske Bank expect the zloty to stay under pressure and forecast the EUR/PLN around the 4.70 level over coming months.

PLN hit by the war in Ukraine

“As our base-case is that the conflict will not be fundamentally resolved and sanctions will stay in place for a considerable period, we think that PLN will not fully recover its pre-war levels. Furthermore, we doubt the central bank will stay the course with monetary policy tightening when the economy weakens.”

“We see EUR/PLN moving sideways near-term but then move slightly higher over the next year. Our path for EUR/PLN is 4.68 in 1M (from 4.52), 4.68 in 3M (from. 4.54), 4.70 in 6M (from 4.58) and 4.74 in 12M (from 4.62).”

This article was originally published by Fxstreet.com.Read the original article here.

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