PLN: Disinflation backs March rate cut – Commerzbank

💡 DMK Insight

Weak January data from Poland is shifting market expectations, and here’s why that matters: With Commerzbank’s Tatha Ghose highlighting the potential for a 25 basis point rate cut at the March MPC meeting, traders need to pay attention to how this could influence the zloty and broader European markets. If the Polish central bank moves to cut rates, it could signal a broader trend of easing monetary policy in the region, especially if other economic indicators continue to falter. This could lead to increased volatility in forex pairs involving the zloty, particularly against the euro and the dollar, as traders adjust their positions based on shifting interest rate expectations. On the flip side, while a rate cut might provide short-term relief for borrowers, it could also raise concerns about economic health, potentially leading to a bearish sentiment in Polish assets. Traders should keep an eye on upcoming economic releases and the market’s reaction to any hints from the central bank leading up to the March meeting. Watch for key support and resistance levels in the PLN/EUR and PLN/USD pairs as the situation develops.