Currency report: Dollar falls, złoty rises

After the US Federal Reserve decreased interest rates by a surprise 50 basis points, investors hoped for data showing that the US market would be stronger than expected.

Tuesday gave investors a glimpse of what they could expect from the rest of the week. Consumer confidence in the US fell to 99.8 points, the lowest level since November 2005, while data from the National Association of Realtors showed that existing home sales in August had plummeted by 4.3 percent against an expected 3.5 percent. Negative data affected the dollar.

The week continued with more negative feedback from the US economy. Most importantly, new home sales decreased by a shocking 8.3 percent against an expected 4.6 percent. This was the largest fall since June 2000. The US dollar reacted with a decrease in value, with the EUR/USD market standing at $1.41 and edging closer to $1.42.

The dollar's situation obviously had a positive impact on the złoty. The growth of investor confidence and the fading of risk aversion has led to the return of capital to emerging markets such as Poland, which could be seen on the USD/PLN market - it noted an increase and ended the week at zł.2.65.

Omar Arnaout, X-Trade Brokers Dom Maklerski SA