The zloty weakened from the strongest in a year as a technical indicator signaled the rally has gone too far and an adviser to the Polish prime minister said the government may cut its 2013 economic growth forecast.
The currency depreciated 0.8 percent to 4.0736 per euro as of 5:10 p.m. in Warsaw after reaching the highest since August 2011 yesterday. It has gained 1.1 percent this month, the third-biggest among 176 global currencies tracked by Bloomberg. The yield on 10-year notes jumped 14 basis points to 4.86 percent following a drop yesterday to the lowest level since March 2006, data compiled by Bloomberg show.
The 14-day relative strength index for the zloty rose to 71 yesterday. A reading above 70 indicates a security may weaken, according to technical analysts. Poland’s government may cut next year’s economic growth forecast to 1.5 percent to 2 percent from 2.9 percent due to the contraction in the euro region, Dariusz Filar, an economic adviser to the prime minister, said in an interview yesterday.
“The zloty is probably close to levels where we could see corrective depreciation spurred by profit-taking,” Janusz Dancewicz, chief economist at DZ Bank Polska SA, wrote in a note to clients.
The RSI identifies possible turning points in securities by measuring the degree with which gains and losses outpace each other in a given period.