Currency report: Złoty recovers ground

The EUR/PLN fell from zł.3.91 on Monday to zł.3.8650 on Friday, while the USD/PLN fell from zł.2.98 to zł.2.945. Emerging-market currencies recovered some ground as investors rediscovered a taste for risk and a fall in the yen gave confidence that carry-trade funding for the purchase of high-yielding assets could last a while longer.

The European Central Bank lifted rates to a five-year high of 3.75 percent on Thursday, but toned down its statement to suggest that rates may be nearing a peak. Higher European interest rates would narrow the spreads with those of emerging markets like Poland, where rates stand at four percent, marring their attractiveness for investors.

The yen slipped to one-week lows versus the euro and the dollar on Friday, as risk aversion abated and the focus returned to economic fundamentals and interest-rate differentials. The US economy added 97,000 new jobs in February, in line with published forecasts, and the euro finished the week at $1.31.

Marek Węgrzanowski

X-Trade Brokers Dom Maklerski SA