Polish Zloty Slips to Weakest in Month on Greek Referendum Risk
Poland’s zloty weakened for a third day to its lowest in more than a month as Greece’s referendum on Europe’s bailout plan damped investor appetite for riskier assets.
The zloty slid as much as 2.7 percent to its weakest level since Sept. 23, and traded 1.5 percent down to 4.4319 per euro by 4:42 p.m. London time. Markets in Poland were closed for a holiday.
Global stocks sank as investors fled to the relative safety of German and U.S. government debt after Greek Prime Minister George Papandreou pledged to hold a referendum and Fitch Ratings said the proposal posed a threat to the region’s financial stability. China’s manufacturing growth slowed, with the purchasing managers’ index falling to the lowest since February 2009, adding to concern global economic growth may falter.
“Following the surprise Greek referendum, poor October Chinese PMI data and amid poor liquidity conditions due to holidays, risk is firmly off,” Gyula Toth, chief strategist for central and eastern Europe, Middle East and Africa at UniCredit SpA in Vienna, wrote in a report today. “As usual in the foreign-exchange space, the zloty is the biggest casualty in the CEEMEA reagion.”
The Markit iTraxx SovX CEEMEA Index of eastern Europe, the Middle East and Africa credit-default swaps surged 22 basis points to 307, according data provider CMA.
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