Zloty Rise vs. Euro as Economic Growth May Cause Rates Hike

The Polish zloty extended its rally for the eighth consecutive day against the euro as the estimates of the Economy Ministry showed that the economy grew with the increasing pace, igniting the speculation that the central bank may raise the interest rates. The Polish currency dropped against the U.S. dollar slightly.

The Economy Ministry’s report showed that the gross domestic product grew by 3.1 percent in the first half of this year, compared 1.8 percent in 2009. The ministry also estimated that the annual rate of the private consumption grew by 2.2 percent. The Polish currency rose the most against the euro today among other emerging market currencies.

Nigel Rendell, senior emerging-market strategist at RBC Capital said

The international environment has been quite helpful and the wave of uncertainty has been removed so that’s encouraging people to go into emerging markets and the zloty looks best in the region. The possibility that interest rates may be lifted before the end of the year is also acting as an incentive.

EUR/PLN traded at 4.0018 today as of 19:57 GMT after opening at 4.0054. USD/PLN fell to 3.0822 from the opening rate of 3.0791.

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