Tuesday morning brings a slight strengthening of the zloty to the basket of major currencies, which is a continuation of the process started yesterday. At 09:10 the EUR / PLN exchange rate fell by 1.10 PLN to PLN 4.6805, the dollar was lower by PLN 0.01 to PLN 4.4335, the British pound by 1.10 PLN to PLN 5.4680, and the Swiss franc was falling PLN 0.8 to PLN 4.4650 and this morning it attacked the lows from March (PLN 4.4639), which may precede further declines of the CHF / PLN exchange rate.
The wave of sudden sell-off that has been pouring over the global stock markets since Thursday, combined with the increased volatility of other assets and the general increase in risk aversion in the global markets, does not have a significant impact on the performance of the Polish currency.
The zloty is saved by the peace of EUR / USD. The pair has been in consolidation above $ 1.05 for over a week, with only minor shocks at the US Federal Reserve (Fed) meeting last week. The same, which is currently behind the observed increase in risk aversion in other markets.
The behavior of the EUR / USD remains the key factor for the zloty performance in the short term. The higher the rate of this pair, the better the chances for a stronger zloty. And vice versa. This means that the situation in the currency market will probably be decided on Wednesday, when the US consumer inflation data will be released. In April, for the first time in many months, inflation is expected to fall to 8.1%. year on year from 8.5 percent in March. A larger than expected decline would overestimate the dollar, while improving market sentiment and strengthening the zloty. Significantly worse data will have the opposite effect.
Later in the week, the shaping of Polish currency pairs will also be influenced by the changing attitude to risk in the global markets, where, probably after the last wave of escape from risky assets, moods will slightly improve (if they are not deteriorated by US inflation data), and this should support the zloty.
Domestic factors may be influenced by whether the Sejm, after several months of postponing and looking for a parliamentary majority, will finally elect Adam Glapiński for the second term of the president of the National Bank of Poland at its meeting on May 11-12.
However, the data on the Polish balance of payments for March (forecast: EUR -2.75bn) and the final reading of consumer inflation in April (forecast: 12.3% y / y) will not have a significant impact.
Source: Marcin Kiepas – Tickmill and ISBnews
