Currency report: The złoty takes a hit

Her negative remarks about foreign investors were also spotted by key currency players. The euro hit zł.4.04 on Monday but the złoty managed to recover, and the euro dropped to zł.3.98 two days later.

This move had a corrective nature and lasted only one day, as investors later decided to sell the złoty again. The Polish currency was losing mainly because of the debt market. Polish bonds dropped as US Treasury-bond yields went up. Investors are afraid that the Fed will hike rates in the coming months and T-bond prices will drop.

The euro finally broke below $1.19 and revealed its probable direction for the forthcoming weeks. The dollar strengthened against all currencies, though the data from the US job market was worse than expected. During this week the dollar extended its gains and managed to hit a two-year low against the euro on Tuesday.

If the situation remains unchanged, the euro could easily drop to as low as $1.10 in the coming weeks.

Maciej Chojnacki, WGI Dom Maklerski