Leaked government conversation in Poland ensures the zloty loses ground

The developing situation in Iraq injected some nervousness into the market over the weekend and into yesterday, with oil prices pushed up by supply concerns over the coming months. As a result of this we saw demand for safe-haven assets increase, with the Japanese yen touching a four-month high as clashes between Iraqi soldiers and rebel militants were reported north of Baghdad.

The Polish zloty was the only other significant mover, losing ground against the majority of its most-traded peers. A conversation was recorded (and leaked) between the governor of Poland’s central bank, Marek Belka, and a government minister. In the conversation the pair discussed certain short-fallings in the economy, growth plans, and doubts over the future of the Marek Belka’s job. The recording has reportedly triggered a rift in the government, and traders have acted accordingly in selling off the zloty. Overnight last night we had central bank meeting minutes released from Australia which has seen the Australian dollar weaken first thing this morning.

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