One recent market development is a sustained sell-off in emerging market currencies. Turkish Lira is one of the biggest fallers.
Unsurprisingly, the Polish Zloty is dragged lower by this trend. The past two months saw USDPLN dropped from 3.25 to 3.75. Against Sterling, Zloty’s weakness was not that pronounced – largely due to GBP’s weakness – but still, GBPPLN dropped from 4.70 to near 5.0.
Moreover, the rate recorded a steep drop yesterday. But today’s countermanding rally (PLN stronger) signals that some traders may be tempted to cover their short PLN positions. Hence we expect some minor rallies off the psychological 5.0 level.
Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.