Currency report: FOMC disappoints

On Monday the EUR/PLN cross was traded at zł.4.10 and USD/PLN at zł.3.27, and the złoty was still suffering a hangover from the former Finance Minister Zyta Gilowska's departure. At the end of the week the euro cost only zł.4.05, and the dollar zł.3.18.

The dollar fell sharply on Thursday after the Fed hiked rates 25 basis points but followed through with a less hawkish than expected policy statement, that could signal a pause in rate tightening at its next policy meeting in August. The dollar had been supported in recent weeks by expectations of higher US rates, and some players had even speculated the Fed could raise rates by 50 basis points.

Hours after the FOMC decision the EUR/USD cross rose from $1.2530 to $1.2770.

On Monday the Polish Central Bank (NBP) held rates steady at four percent, but MPC representatives signaled that at the end of the year a small rate hike is possible.

Marek Węgrzanowski

X-Trade Brokers Dom Maklerski SA