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Currency report: Zoty continues to gain

The z?oty gained clearly against the dollar after the US currency fell sharply on the international market, which tends to support higher-risk emerging-market assets. The dollar lost ground after China's central bank said it had a plan to diversify its foreign-exchange reserves, mostly held in US dollars. The EUR/USD rose on Friday to a two-month high at $1.29.

According to Polish officials, the z?oty has room to gain further, buoyed by the economy's strong performance, and may climb to z?.3.7 against the euro in the medium term, said Deputy Finance Minister Piotr Soroczy?ski. Finance Minister Zyta Gilowska also said the currency should continue recent moderate gains next year.

The z?oty is still supported by economic data, and the unemployment rate is expected to fall to 14.9 percent in October from 15.2 percent a month earlier.

Expectations the central bank will keep interest rates steady till the end of the year and raise them moderately next year also support the debt market alongside limited supply in the final months of the year.

Marek W?grzanowski
X-Trade Brokers Dom Maklerski SA