Currency report: CPI moves FX markets

This could be observed on the EUR/PLN and USD/PLN markets, which on Friday stood at zł.3.80 and zł.2.84, respectively.

In the US on Wednesday, retail prices increased by 1.4 percent against an expected increase of 0.6 percent, while import prices increased 0.9 percent against an expected increase of 0.3 percent. Both reports had an impact on the US dollar, which increased slightly in value. The State Treasury's 10-year note remained strong, approaching 5.30 percent.

Thursday produced further positive reports from the US where PPI increased by 0.9 percent against an expected increase by 0.5 percent. The most significant information arrived on Friday when it was announced that CPI in the US increased by 0.7 percent against an expected increase of 0.6 percent and that the core CPI increased by a mere 0.1 percent against an expected increase by 0.2 percent. This eased concerns over inflation and signaled that the US Federal Reserve might consider lowering interest rates in the future. The effects of this could be directly seen where the Treasury's benchmark 10-year note dropped to 5.19 percent and the EUR/USD market increased to $1.33.

Omar Arnaout X-Trade Brokers Dom Maklerski SA