The zloty climbed to its strongest level in 10 weeks after German business confidence improved for a second month, boosting expectations that Poland’s biggest export market can withstand the euro area’s recession.
The zloty appreciated 0.2 percent to 4.0736 per euro, its strongest rate since Oct. 10, as of 11:43 a.m. in Warsaw. The currency has jumped 9.6 percent this year, the steepest gain among 31 major currencies tracked by Bloomberg. The yield on 10-year notes fell less than 1 basis point to 3.90 percent.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, rose to 102.4 in December from 101.4 a month earlier. Ifo’s gauge of the current situation slipped to 107.1 from 108.1, while a measure of executives’ expectations rose to 97.9, the highest since May, from 95.2 in November. The Polish economy, which relies on Germany for 25 percent of its sales abroad, slowed to its weakest pace of growth in more than three years last quarter.
“The improvement in the expectations component of the index may increase confidence in German economic resilience,” Rafal Benecki, chief economist for Poland at ING Groep NV in Warsaw, said in an e-mailed note to clients. “This would boost the euro-dollar rate and help the zloty.”