The zloty headed for its lowest level in almost six weeks as a cut in the World Bank’s global growth forecast weakened emerging-market assets and amid mounting expectations the Polish central bank will cut interest rates next month.
The zloty lost 0.3 percent to 4.1278 per euro at 10:26 a.m. in Warsaw, poised for its lowest level since Dec. 6. Yields on 10-year notes rose four basis points, or 0.04 percentage point, to 4.08 percent, increasing for a second day.
Emerging-market stocks fell to a two-week low and currencies weakened as the World Bank projected the global economy will expand 2.4 percent this year, down from a June forecast of 3 percent. Poland’s inflation rate fell to 2.4 percent, or below the central bank’s target, a report showed yesterday, bolstering expectations for a fourth rate cut in February.
“The zloty is suffering from deteriorating sentiment globally,” Joanna Bachert, an analyst at PKO Bank Polski SA, said in an e-mailed report today from Warsaw. “It’s also due to expectations for a rate cut and technical factors as the euro has built a strong support at 4.1 zloty.”
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