**BREAKING: Polish Zloty Faces Headwinds as Mixed Economic Data Caps Currency Gains**
The Polish zloty is encountering resistance following divergent PMI readings across Central Europe, according to ING analyst Frantisek Taborsky. While Czech manufacturing sentiment shows strength, Poland’s weaker performance is weighing on the currency despite projections of above 3% growth for 2026.
Softer inflation data out of Poland is fueling expectations of a dovish shift from the National Bank of Poland, with markets now pricing in modest rate cuts ahead. This dovish pivot contrasts sharply with the more resilient Czech economic indicators, creating a widening policy divergence across the CEE region.
Traders should note that zloty upside remains limited in the near term as monetary easing expectations build. Currency pairs involving PLN may experience continued volatility as the market digests the inflation trajectory and central bank signals.
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FXnCO Insight
** Consider defensive positioning on PLN crosses as rate-cut pricing accelerates, while Czech koruna may offer relative value in CEE currency trades.
Source: FXStreet