Zloty Drops for Second Day as Europe Concern Grows Before Summit
Poland’s zloty declined for a second day as reports showed economic conditions in the euro area, the country’s biggest export market, worsened while European leaders gathered in Brussels to discuss ways to stem the debt crisis.
The zloty lost 0.8 percent to 4.2861 per euro as of 12:03 p.m. in Warsaw, the steepest drop among more than 20 emerging- market currencies tracked by Bloomberg.
Economic confidence in the euro area slumped to the lowest in more than 2 1/2 years in June, the European Commission said today. The Ifo economic research institute said Europe’s sovereign-debt crisis will damp Germany’s economic performance this year and a report showed unemployment in the nation climbed in June for the fourth month this year.
Euro-area finance ministers set the stage for today’s gathering in Brussels of the European Union’s 27 chiefs, approving Cyprus’s bailout and detailing how they would aid Spanish banks. Consensus breaks down on safeguarding governments in Spain and Italy, with German Chancellor Angela Merkel rejecting calls to do more to cut their borrowing costs.
“We think that the road map for coming out of the crisis will be full of holes,” Rafal Benecki and Grzegorz Ogonek, economists at ING Groep NV’s Polish unit, wrote in an e-mailed note. “This won’t bring optimism to financial markets.”
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