The last weeks were not good for the zloty (PLN). Accumulated are negative factors, both internal and external. As a result, the dollar is most expensive for past few years, and the euro from Brexit voting. Friday could be for Polish currency very important.

Difficult year for the Polish currency began with the decision of Standard & Poor’s, which unexpectedly lowered Poland credibility rating to BBB+, while changing the bias to negative, which suggests that further cuts rating may be a matter of time. These risks can materialize today, because in agency calendar appears planned review of Polish rating.

Has S&P reason to downgrade? Yes and no. Certainly the risk of the fiscal path that is in focus each agency (in the end the point is whether the government will be able to repay borrowed money) since then increased. First of all, economic growth is clearly disappointing. It is true that the government manages to get a better collection of VAT, but significant downward deviation in increase in the forecasts may raise concerns about the performance of future budgets.

Secondly, part of the domestic risks , which showed agencies have already materialized. The retirement age was lowered and the dispute over TK (S&P attached to this rather large weight) continues. Deteriorated also external conditions. Sale of bond markets also increases the outflow of capital from the Poland and yesterday, yields on 10-year bonds drew to 3.8%. Before the decision of S&P in January was 2.8-2.9%. And that means higher costs of debt service and in the future a greater deficit and also in an extreme scenario, the liquidity crisis.

Since the S & P maintains a negative attitude would seem logical downgrade of rating. However, the question remains whether the agency, which already assesses Poland’s relatively bad (2 degrees lower than Moody’s) will want to leave a rating so blatantly worse than the competition. Because the agencies are not obliged even to propose formal reasons, S & P can remain tight-lipped and wait for the Fitch and Moody’s move. Thus, we see a good chance that the rating will not be changed today, and PLN will be able to at least temporarily rebound. The decision will be announced after the closing of markets, perhaps at night hours.

Also very important for the zloty will be today’s US data. Discussed sale of in the debt market has its origin in the United States, where is expected not only rate hike in December, but also series of such moves in the coming months. The better the data in USA the worse for the bond market and thus for the zloty(PLN). NFP report will be announced at 14:30.

About 10:15 the USDPLN costs 4.2091, EURPLN- 4.4907 CHFPLN- 4.1662, while the GBPPLN- 5.3161

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