Currency report: International uncertainty

This decision was anticipated by investors due to reasons like the fall of the CPI to 2.3 percent (from 2.5 percent), and the lower-than-expected increase in retail sales of 15.1 percent against an expected increase of 19 percent. It is quite likely that interest rates will also not be increased in June, but a further increase in July seems highly likely according to many analysts. Poland's GDP in the first quarter of 2007 also exceeded market expectations and noted an increase of 7.4 percent against an expected 7.2 percent. This positive information could be observed on the USD/PLN and EUR/PLN markets which were quoted at zł.2.83 and zł.3.81, respectively, on Friday.

The publication of US economic data at the end of the week brought mixed feelings. On the positive side was labor-market data showing a drop in the unemployment rate in May by 4.5 percent based on a rise in payrolls of 157,000, against an expected increase of 140,000. On the negative side was the increase of the core PCE, index by a mere 0.1 percent against an expected increase of twice as much. The EUR/USD market was quoted on Friday at $1.34.

Omar Arnaout, X-Trade Brokers Dom Maklerski SA