UBS Euro To Polish Zloty Forecast: PLN Firm As Easing Expectations Already Priced - Exchange Rates UK

What the desk is arguing

UBS maintains that the Polish zloty will remain resilient against the euro as the market has already fully priced in anticipated monetary easing by the National Bank of Poland. The desk sees limited scope for further PLN weakening given that the repricing of rate cuts is largely complete.

This view is supported by the zloty's recent stability despite dovish central bank rhetoric, indicating that the negative impact of lower rates is already discounted. UBS expects EUR/PLN to trade in a tight range in the near term, with risks skewed to the downside for the euro.

Implicitly, the desk is pushing back against the bearish PLN consensus that assumes further weakness as the NBP proceeds with rate cuts. Instead, they argue the zloty has already adjusted, and any additional easing will have a muted impact.