Currency report: Złoty back on track?

When such information is scarce, investors usually focus on the major currency pair - the EUR/USD - since it determines the movement of other currencies.

After strong declines during the previous three weeks, the EUR/USD rebounded from $1.4685 to $1.4810 over the course of the week. Economic sentiment (as measured by the Centre for European Economic Research in Germany) also improved, contributing to to higher demand for the euro.

After three successive weeks of losses, the Polish złoty seems to be back on track in its long-term appreciating trend. Investors are worried that the slowdown of the euro-zone economy might affect Poland, however. One sign that it might happen was the worse-than-expected industrial output data (a 5.6-percent increase against a forecast 7.4 percent).

Despite those worrying signs, the złoty advanced from zł.2.2645 to zł.2.2285 against the dollar and from zł.3.3180 to zł.3.3015 versus the euro, mainly in reaction to macroeconomic data.

Adam Narczewski, X-Trade Brokers Dom Maklerski S.A.