Currency report: Outlook (still) unclear

which was under pressure from the Bank of England's rate cut. The dollar lost 0.7 percent to the euro, 1.7 percent to the yen and almost 1.5 percent to the Swiss franc.

The outlook - especially on the EUR/USD, still remains unclear. Although we had a new record - at €1.5911 - it was just a notch above the previous peak from March 17th and the market was clearly uncertain if another appreciation wave would carry the euro. The data was mixed - a growing trade gap and a hawkish European Central Bank supported the euro, but a bullish initial claims report plus a higher-than-anticipated rise in import prices provided unfavorable news. It still looks, however, as though the demand side hasn't given up and may try its strength again.

The situation was a bit clearer on the USD/JPY, where the î102.60 resistance level proved firm and, given the worsening moods on global stock markets, the market is looking at a support level of î98.60-98.80.

Meanwhile, the mood on the Polish forex was more than bullish. The USD/PLN was down to a mere zů.2.1580 and the EUR/PLN stood at zů.3.4150 on Friday, which marked gains (for the zůoty) of almost three percent and two percent respectively. Afterwards we saw some profit taking, but the mood remains very optimistic as investors await a wave of Polish macroeconomic reports for March expected to be published this week.

Przemysůaw Kwiecień, X-Trade Brokers Dom Maklerski SA