Currency report: Złoty weaker against rallying dollar

During the week the dollar began its correction, causing the EUR/USD to decline from $1.4270 all the way to $1.4060. The greenback gained against the majority of currencies, including the złoty.

The dollar has finally retreated from its all-time high at $1.4280 against the euro, which it reached two weeks ago. It seems that the market is pricing in expectations that the US mortgage crisis will end soon. The impulse for further strenghtening of the dollar came from macroeconomic publications. Non-farm payrolls were at 110,000, better than the 100,000 forecast. But what really gave the dollar a boost was the correction of last month's non-farm payrolls figures, which were revised up from -4,000 to +89,000.

The USD/PLN advanced from zł.2.6350 to zł.2.6670 throughout the week, reaching as high as zł.2.6805 on Friday. The EUR/PLN experienced big swings, falling as low as zł.3.7595 and climbing as high as zł.3.7750. On Friday, the Polish currency came back strong to reach zł.3.7560.

Adam Narczewski, X-Trade Brokers Dom Maklerski