Powerful changes in the currency market! Euro (EURPLN) and dollar (USDPLN) rate sharply up. Polish zloty totally depreciated – macro forecasts

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Last week, the EURPLN rate increased to 4.6931 (the zloty depreciated by 1.3%). Throughout the last week, we saw an increase in the EURPLN rate. The zloty weakening was supported by increased risk aversion reflected by an increase in the VIX index.

The continued strong rise in global inflation remains a negative factor for investors ‘sentiment, fueling investors’ expectations of interest rate hikes by major central banks. Locally, the crisis on the border with Belarus was conducive to the increase in the EURPLN rate. As a result, last week the EURPLN rate exceeded 4.69 and was at the highest level since March 2009. On Friday, an interview with the President of the National Bank of Poland A. Glapiński was published, who said that “in the conditions of the current elevated inflation, there would be no further weakening of the zloty. consistent with the NBP interest rate policy ”.

Powerful changes in the currency market!  The euro (EURPLN) and the dollar (USDPLN) pushed upwards.  Polish zloty totally depressed - macro forecasts - 2

In our opinion, this indicates a growing probability of the NBP’s currency intervention in the event of a further depreciation of the zloty, which would be in contradiction with the monetary policy aimed at lowering inflation to the level below 3.5% over the horizon of several quarters.

Powerful changes in the currency market!  The euro (EURPLN) and the dollar (USDPLN) pushed upwards.  Polish zloty totally depressed - macro forecasts - 1

IN Last week there was also a further weakening of the euro against the dollar

It is favored by differences in the attitude in monetary policy of the Fed and the ECB, where in the case of the US investors expect a faster interest rate increase than in the euro zone, as well as the above-mentioned increase in global risk aversion. Due to the decline in the EURUSD rate and the increase in the EURPLN rate, the USDPLN rate last week exceeded 4.15, which is its highest value since May 2020.

Last week brought a return of pressure on zloty depreciation. The EUR / PLN exchange rate temporarily even reached the barrier of 4.6493, although in the case of closing the day, none of the sessions of the period in question managed to exceed the significant technical level of 4.6328. The source of pressure on the zloty weakening, but .. Read

Euro exchange rate sharply down!  What is the strength of the dollar?  Forex turmoil - data and forecasts [EURPLN, USDPLN, EURUSD, EURCHF]

This week, the key issue for the zloty will be the publication of domestic data on industrial production, scheduled for today

We believe that if our forecast is higher than the market consensus, the data may contribute to the strengthening of the Polish currency. The publication of domestic retail sales data scheduled for Tuesday will not have a significant impact on the market in our opinion.

The data from the euro zone (flash PMI indices, Ifo index for Germany) and the US (second GDP estimate, preliminary durable goods orders, PCE inflation, final University of Michigan index, sales of houses on the secondary market and sales of new ones) will most likely also be neutral for the zloty exchange rate. houses). On the other hand, the publication of Minutes from the November FOMC meeting may be conducive to the increased volatility of the zloty exchange rate.

Powerful changes in the currency market!  The euro (EURPLN) and the dollar (USDPLN) pushed upwards.  Polish zloty totally depressed - macro forecasts - 3

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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