The zloty rose the most among developing-nation currencies as Citigroup Inc. said it saw more gains on the back of Poland’s accelerating economic growth.
The currency appreciated 1.1 percent to 4.0283 against the euro at 4:20 p.m. in Warsaw, rising from a one-month low. Polish economic growth will quicken to 3.9 percent this year from 3.4 percent in 2014, Citigroup’s Warsaw-based economists Piotr Kalisz and Cezary Chrapek wrote in a note Monday.
Poland’s economy is benefiting from an upturn in growth in the euro area, its main trading partner. Exports expanded in April at the fastest pace in 13 months even as manufacturing growth slowed, HSBC Holdings Plc and Markit Economics said in a report Monday. The country posted a current-account surplus of 116 million euros in February, compared to a gap of 651 million euros a year earlier, central bank data show.
“Poland has significantly reduced its current account deficit in the last few quarters, while economic growth accelerated at the same time, which should be positive for the zloty,” the Citigroup economists wrote in the note. “We therefore see chances for the zloty to strengthen toward 3.90 per euro in the short term.”
While Poland’s manufacturing purchasing managers’ index fell to a four-month low of 54 last month, output growth “remained sharp,” indicating an “overall improvement in operating conditions,” HSBC and Markit said today.
The yield on Poland’s 10-year zloty government bond was little changed at 2.63 percent on Monday, the highest since December on a closing basis.