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USDPLN instead of USDRUB?

  • #1
  • First Post: Dec 23, 2014 12:15pm Dec 23, 2014 12:15pm
Last 5 days brought significant depreciation of USDPLN and EURPLN (about 5%), Polish Zloty is under pressure recently due to the geopolitical situation of Poland, which has significant trade relations with Russia, which means that their export can be weakened by Russian crisis and embargo on European food introduced by Russia this year.
Polish economy went into deflation this year which pushes Polish National Bank to decrease further interests rates. Such tendency can fuel PLN depreciation.

For all traders which can't trade on RUB anymore PLN can be a good alternative, liquidity on PLN is the biggest among all Central European Countries which attract foreign investors and speculators - they can easily go out from their positions whenever they want.
  • #2
  • Edited 4:19pm Dec 27, 2014 3:17pm | Edited 4:19pm
Hope this thread gets a chance to life for a while… Thanks tomas.v to open it!
Zloty weakness continued the last days as well. Setbacks were tiny.
In addition to tomas.v points we can add a re-strengthened US economy outlook, speculating on interest rate increase.

On Friday Dec. 26th USD/PLN closed above 3,59 PLN which is higher than previous closing high from Mai / June 2012.
Where is the boundary? Will we see prices starting with a "4"?
  • #3
  • Dec 27, 2014 6:10pm Dec 27, 2014 6:10pm
I wouldn't bet on significant further depreciation of Zloty. We must remember that even intervention of National Bank of Poland (NBP) is possible when stability of exchange rates are jeopardised. The question is whether this is real strong speculation move or this depreciation is fault of discounting future lower interest rates. Bear in mind shallow end-of-year-Christmas market.
  • #4
  • Jan 2, 2015 8:52am Jan 2, 2015 8:52am
Thanks guys for your comments, i was observing PLN for many months and this currency is treated as a proxy for many Central and Eastern European Currencies. I agree that it was mainly a speculation move during the end of the year, but as you can see Zloty didn't move back. If foreign banks want to bet on depreciation of CEE currencies they are using mainly zloty because of better liquidity. Watch carefully this pair, it can be interesting while the situation in Russia develops.
  • #5
  • Jan 6, 2015 7:16am Jan 6, 2015 7:16am
USDPLN is testing longterm resistance, i recommend to follow this pair with greater attention
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  • #6
  • Jan 7, 2015 12:34am Jan 7, 2015 12:34am
Subscribed.
http://etf.deutscheawm.com/DEU/DEU/D...Valuations.pdf
Poland discussed, p. 6
  • #7
  • Jan 11, 2015 8:11am Jan 11, 2015 8:11am
Thanks for the link but it seems that Deutsche doesn't have too good analysts for EMEA USDPLN 3.15 for Q4 2014 and 3.26 for Q1 2015 don't match with reality
  • #8
  • Jan 18, 2015 2:03pm Jan 18, 2015 2:03pm
Quoting tomas.v
Thanks for the link but it seems that Deutsche doesn't have too good analysts for EMEA USDPLN 3.15 for Q4 2014 and 3.26 for Q1 2015 don't match with reality
Tomas., As well as interrest rate prediction does not fit well with 2.0% in Q4 2014.

Close on Friday almost 3.72:
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  • #9
  • Mar 10, 2015 4:02pm Mar 10, 2015 4:02pm
Quoting tomas.v
Thanks guys for your comments, i was observing PLN for many months and this currency is treated as a proxy for many Central and Eastern European Currencies. I agree that it was mainly a speculation move during the end of the year, but as you can see Zloty didn't move back. If foreign banks want to bet on depreciation of CEE currencies they are using mainly zloty because of better liquidity. Watch carefully this pair, it can be interesting while the situation in Russia develops.

i'd short it back to 3.70 from here.
question: how exposed were the poles to the chf credits?
i've read something about romania and hungary - i believe poland was on the list.
if they were hit too hard (in a great number), i guess there's a certain political incentive to interfere with the central bank and appreciate the zloty.

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  • #10
  • Mar 10, 2015 5:09pm Mar 10, 2015 5:09pm
Their mortages where/is in CHF. But CHF weakened pretty much back to where it was before depegging so i dont think its the issue anymore. Poland is in bad shape though. Deflation @ -1.3%. They just cut interest rates last week.
  • #11
  • Mar 10, 2015 5:55pm Mar 10, 2015 5:55pm
Quoting pbylina
Their mortages where/is in CHF. But CHF weakened pretty much back to where it was before depegging so i dont think its the issue anymore. Poland is in bad shape though. Deflation @ -1.3%. They just cut interest rates last week.
thanks pbylina!
i guess you are right about the chfpln (unless the chf goes up again) and about the cut in interest rates (which i knew of).

it's just that i was trying to answer to tomas and to his russia/ruble playbook.
i'm not that good at fundamentals.
but from an event perspective, i understand that the ruble depreciated under two events: a) sanctions b) oil (where i chose to trade usdmxn)
zloty has the cut in interest rates (which may be a further trend) but my perception right now is that it's driven by the fears that fed will hike the interest rates (which will overheat soon and correct).
am i totally wrong?

good luck!

p.s. do you happen to have access to some cds charts regarding poland?
  • #12
  • Mar 10, 2015 6:09pm Mar 10, 2015 6:09pm
PLN has to deal with a few threats
1) Deterioration of Ukraine crisis which can be very disastrous for Polish economy (bad relations with Russia)
2) Outflow of capital from emerging markets to US due to incoming rate hikes in States, this could be seen even today
3) Greece crisis, which can lead to higher volatility and capital outflows.

I was trying to enter USDPLN a few times, but the levels now are very high, so it is good to be cautious, some correction can happen.
  • #13
  • Mar 11, 2015 3:44am Mar 11, 2015 3:44am
So as of today, while USD is rising steadily against all exotics that I follow, a quite strange bearish movement began, leading with TRY and ZAR, and finally affecting PLN, HUF, MXN and SEK, roughly in that order, but MXN early. Any insight into why? Zloty has been the weakest of them recently so I was surprised to see it strengthen. USDTRY has been the slowest moving up so that's nothing new.

Personally also waiting to enter Zloty if a good opportunity presents itself, but I would like to understand this bearish movement.
  • #14
  • Mar 11, 2015 5:37am Mar 11, 2015 5:37am
USDPLN is still rising, if you are brave you can join this train , you have to understand that USDPLN is only a proxy for EURPLN which is the main pair, if there is no move on EURPLN and EURUSD is going down, USDPLN will always move higher against PLN.
  • #15
  • Mar 11, 2015 5:58am Mar 11, 2015 5:58am
Quoting tomas.v
USDPLN is still rising, if you are brave you can join this train , you have to understand that USDPLN is only a proxy for EURPLN which is the main pair, if there is no move on EURPLN and EURUSD is going down, USDPLN will always move higher against PLN.
Actually it was a great opportunity in the end to jump in, but I am hoping for a better one tomorrow before US data comes out. Thanks for pointing that out its true but in this case Eur was going down while Pln made a slight recovery - maybe it's influenced by other European currencies? It seems to me, volatility and spread considered, the best currencies to trade against the dollar right now, for those looking to diversify are:
1) EUR
2) CHF
3) DKK
4) PLN
5) HUF
6) SEK
  • #16
  • Mar 11, 2015 6:05am Mar 11, 2015 6:05am
Actually DKK is better than CHF overall, and in some ways, better than EUR, since the EUR leads the way. And spread is even lower than CHF for my broker.
  • #17
  • Mar 11, 2015 10:53am Mar 11, 2015 10:53am
Quoting Azg1001
{quote} Actually it was a great opportunity in the end to jump in, but I am hoping for a better one tomorrow before US data comes out. Thanks for pointing that out its true but in this case Eur was going down while Pln made a slight recovery - maybe it's influenced by other European currencies? It seems to me, volatility and spread considered, the best currencies to trade against the dollar right now, for those looking to diversify are: 1) EUR 2) CHF 3) DKK 4) PLN 5) HUF 6) SEK
PLN was stronger than dollar? What are you looking at 5min tf? Who knows the reason. If we knew the reason for every single little move we would be trillionaires.
  • #18
  • Mar 11, 2015 11:46am Mar 11, 2015 11:46am
Quoting tomas.v
USDPLN is still rising, if you are brave you can join this train , you have to understand that USDPLN is only a proxy for EURPLN which is the main pair, if there is no move on EURPLN and EURUSD is going down, USDPLN will always move higher against PLN.
good to know, thanks!
  • #19
  • Mar 11, 2015 1:47pm Mar 11, 2015 1:47pm
It will be interesting to observe EURPLN behaviour while EURUSD is going toward parity, as you can see EURPLN is not losing too much (EURPLN is the main pair), so USDPLN has to go up to reach the parity EURPLN=USDPLN. If EURUSD hits parity I expect USDPLN and EURPLN at 4.05 level.
  • #20
  • Mar 12, 2015 2:00am Mar 12, 2015 2:00am
It looks like USDPLN price lookin' for correction at the moment with support 3.83 and then might hit top again above 4.
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