Poland’s October election adds downside PLN risk

Poland's smaller trade linkages to China and its status of net commodity importer places the PLN in a relative sweet spot compared to other EM currencies. That did not stop EUR/PLN from gaining 2.1% in August. A move up to 4.30 is not ruled out if equity market turmoil persists and the run-up to Poland's general election adds political uncertainty.  

USD/PLN rose only 0.14% over the past month and has failed so far to exit the 3.6297-3.8566 trading range in place since May. The economy expanded 3.3% yoy in Q2-15 while CPI edged up in July to -0.7% from -0.8% in June. The NBP kept its key interest rate unchanged at 1.50% on 2 September.

"Our EM colleagues initiated a long PLN/ZAR trade at 3.32", says Societe Generale.