Poland: Thank you Fitch

Danske Bank A/S
http://www.danskebank.com/

Thu, 18 Jan 2007 16:43:28 GMT
by Lars Christensen, Lars Rasmussen

Fitch Ratings on Thursday upgraded Poland's debt ratings to "A-" from "BBB+". The upgrade should be seen in the light of Poland’s strong fiscal and external balances. On FX markets, the PLN gained roughly 0.5% against the EUR, going from EUR/PLN 3.882 to 3.864, while 10Y government bond yields where unaffected by the news.

We welcome today’s upgrade, which is good news for Polish fixed income markets, where investors will now demand lower risk premiums, but we would stress that, in spite of today’s upgrade, we still consider the political situation worrying, and we would not recommend going long in the Polish currency on this news. We believe that the coming months will prove hard times for the PLN, and we stick to our three-month forecast of EUR/PLN 4.05.

Source:fxstreet.com