FOREX.com | Nov 26, 2011 12:32PM ET
Nearly 55% of Polish exports are consumed by neighboring Euro-area economies making Poland’s economy highly dependent on overall Euro-area economic health. Poland’s current account as a % of GDP is problematic in itself as the -4.5% deficit highlights Eastern Europe’s largest economy’s vulnerability to external risks.
Both growth and inflation are rising at a +4.3% clip while the economy grapples with an unemployment rate of +11.8%. On Thursday, 5yr yields on PLN denominated government bonds recorded multi-month highs around 5.40% and EUR/PLN looked set to test the key 4.50 figure as EZ periphery to core debt contagion fears intensified.
The NBP (Poland’s central bank) directly intervened in currency markets by offering EUR with the intent of supporting PLN but any post-intervention gains were pared back within hours.
Data Watch - 3Q GDP y/y (Nov. 30), NBP Inflation Expectations (Nov. 30), NOV Manufacturing PMI (Dec. 1).
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