Currency report: Central bank influence

The Bank of England increased interest rates for the fifth time this year, adding a further 25 basis points, to reach 5.75 percent. It is expected to increase rates once more this year, to reach 6 percent. The GBP/USD market noted an increase of about 50 pips at the same time.

By contrast, the European Central Bank left interest rates unchanged at 4 percent, but an increase also seems possible in September.

The EUR/USD market noted an increase this week despite good information from the US. This included payroll data growing by 320,000, against an expected 28,000, and the ADP report which noted an employment increase of 150,000 - the highest in the last half year.

The euro zone also produced positive information: the unemployment rate fell from 7.1 percent to 7 percent, the lowest level since 1996; the PPI decreased by 0.3 percent m/m; and the PMI increased to 58.3 points, up from 57.3 in May. The złoty was influenced by positive feedback from the euro zone and this could be observed on the USD/PLN market, which decreased to the level of 2.76 from 2.77.

On Friday, July 6, the EUR/PLN market was quoted at 3.75 while the EUR/USD was 1.36.

Omar Arnaout X-Trade Brokers Dom Maklerski SA