Currency report: Macroeconomic mania

Last week was exciting on currency markets, with lots of significant macroeconomic data published. Most of the data from the US economy seemed positive enough for the US dollar to continue its appreciation and the EUR/USD market fell as low as $1.4570.

I believe that the decrease on the EUR/USD market will continue, with the first possible support levels being $1.4355, $1.4219 and $1.400. The first two are more probable as they represent 38.2-percent and 41.4-percent retraces of gains seen at the end of 2005.

The US Federal Open Market Committee minutes were published, and the Fed underlined the need to increase rates in the near future in order to combat inflation.

As for the Polish market, better-than-expected data on retail sales was published showing an increase of 14.3 percent y/y against an expected 14 percent increase. Unemployment fell to 9.5 percent and GDP in Q2 increased by 5.8 percent.

This did not have much of an influence on the Polish złoty. The Monetary Policy Council also left rates unchanged at the level of six percent, as expected, but one more increase is still expected for this year.

Omar Arnaout , X-Trade Brokers Dom Maklerski S.A.