Zloty Advances to Strongest in a Week on U.S. Jobless Data

The zloty gained to the strongest level in more than a week, erasing earlier losses, after U.S. payrolls topped analyst estimates, boosting investors’ appetite for riskier assets.

The Polish currency appreciated 0.2 percent to 4.1122 per euro as of 15:03 in Warsaw, extending this week’s advance to 0.6 percent. Yields on 10-year Polish bonds fell 10 basis points, or 0.1 percentage point, to 4.483 percent, according to data compiled by Bloomberg.

The Labor Department in Washington said 171,000 workers were added to U.S. payrolls in October. That figure exceeded the most optimistic forecast in a Bloomberg survey in which the median called for an advance of 125,000. Manufacturing in Poland contracted for a seventh month in October, bolstering the case for a cut in interest rates at a monetary policy meeting next week.

“Strong U.S. data built investors’ confidence,” Piotr Bielski, an economist at Warsaw-based Bank Zachodni WBK SA, said by phone today. “There is the question how long will it support the zloty as local factors connected to expected rate cuts and continuous public finance crisis in Europe work against currency appreciation.”

The Purchasing Managers’ Index for Poland, a gauge of manufacturing performance, stayed below the level indicating expansion while rising to 47.3 percent in October.

Poland’s Monetary Council will meet on Nov. 7 to review interest rates. Economists expect a 25 basis-point cut, according to a Bloomberg survey.

A cut in rates now would be a “natural” consequence of the slowdown, Governor Marek Belka was reported as saying in Gazeta Wyborcza on Oct. 25.

The U.S. jobless rate increased to 7.9 percent from 7.8 percent in September as more people entered the labor force.

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