Zloty Reaches Strongest Level Against Euro Since 2020

The zloty has reached its strongest position against the euro since February 2020, according to Ebury analysts. Despite a moderate recovery in the Polish economy, the pace is slow, and consumer inflation for May will be crucial, impacted by the return to a 5% VAT rate on food. Last week saw minimal market movements with the zloty maintaining its strength. Global economic data remain positive but inflation persists above central banks' targets, limiting interest rate cuts in 2024. The European Central Bank is expected to cut rates in June. Attention this week is on key inflation readings from the US and the eurozone, which may influence currency market expectations and the strength of the euro.