Currency report: Dollar rallies on oil prices

This was for two reasons: sinking oil prices and the markets interpreting ECB president Jean-Claude Trichet's remarks as offering no clear signal that rates would rise next month or in March, as financial markets had predicted.

The ECB left interest rates unchanged as expected, although the market is still pricing in another ECB rate rise by the end of the first quarter. The EUR/USD traded at $1.2930 on Friday afternoon.

Poland's złoty weakened last week and the USD/PLN rose above the psychological level of zł.3. On Wednesday, parliament approved the government's candidate for central-bank governor, Sławomir Skrzypek, replacing veteran outgoing chief Leszek Balcerowicz. The new governor faces doubts from analysts about whether he is qualified to set monetary policy and manage the bank's large analytical staff, and whether he will act independently of the conservative-run government.

The euro peaked at zł.3.91 on Wednesday but then fell to zł.3.87-3.88.

Marek Węgrzanowski

X-Trade Brokers Dom Maklerski SA