- Constructive EUR outlook on stable EMU growth, fiscal stimuli, ECB’s hold and QT.
- Robust growth in Poland faces headwinds from fiscal, weaker labour market dynamics.
- Cooling Polish inflation is opening the door to NBP cuts, expected to front-load in 1Q26.
- PLN is deeply overvalued based on its REER, a correction from these levels looks likely.
- Stretched technical levels in EURPLN. Scope to retest the January 2024 peak.
- Our targets 4.3449 and 4.4794 represent the 38.2% and 61.8% Fibonacci retracements of the September 2023 peak and the March 2025 bottom.
- Risks: resilient Polish economic growth and a potential looming Ukraine war resolution.