Currency report: Złoty down, złoty up

EUR/PLN broke higher from its one-year downward track and rose as high as zł.3.945 before investors decided to re-buy the złoty. On Tuesday the attack was repeated but the resistance was not broken and the market began to fall. At the same time, US yields turned south and capital was forced to come back to the emerging markets. Huge inflows helped not only the złoty but also our bonds and shares. EUR/PLN dropped as low zł.3.83 and USD/PLN hit zł.3.14. The situation after this week is mixed and we must wait a few sessions before we can set a new direction for the złoty.

Over five days the American currency lost almost 2.5 percent against the euro, pushing EUR/USD to the highest level since the end of January. Investors decided to sell the dollar as the US data showed that future interest rate hikes are less likely. The greenback is losing also due to the huge US trade imbalance and current account deficit. Foreign capital inflows to the US are too small to finance the growing deficit, which may have a negative impact on the growth of the economy.

Maciej Chojnacki

WGI Dom Maklerski