Currency report: The złoty loses again

On Wednesday the złoty strengthened against the euro and dollar as foreign investment funds came back to emerging markets not only in Eastern Europe, but also in South America. The euro easily reached zł.3.96 and investors looked happy with a Law and Justice minority government. The positive sentiment for the złoty continued on Thursday, however the euro was unable to break the zł.4 support level. From a technical point of view it was very positive for złoty bears who decided to sell the currency on Friday. The selloff was also visible on the bond market. The euro and dollar jumped to zł.4.00 and zł.3.36 respectively.

The dollar has been moving in a wide consolidation area between EUR 1.19 and EUR 1.22 for one month. This week the greenback gained ground as the Fed raised US interest rates to 4 percent. It was the 12th consecutive hike and probably not the last one in this cycle. The US currency was gaining mainly against Japanese yen, reaching ¥118.00 which is the highest level since September 2003.

Maciej Chojnacki

WGI Dom Maklerski