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PLN reaches all time high against euro
The Polish currency experienced big swings throughout the course of the week.
Surprisingly, U.S equities markets reacted with a strong increase, which was an impulse for the dollar to gain value. Sentiment towards the American currency came back and the EUR/USD tumbled all the way to $1.5690 on Friday while at the beginning it remained way over the $1.59 level.
The gaining dollar and decreasing risk aversion caused investors to pull their money out of emerging markets’ investments and put them into U.S equities. The Złoty tumbled and reached zł.3.2650 against the Euro and zł.20770 against the dollar. During the second part of the week, the local currency regained momentum. Core inflation in Poland grew to 3.4% while the market forecasted a 3.3% increase. Analysts expect that the Monetary Policy Council will hike interest rates next week on Tuesday by another 25 basis points to 6.25%. Such scenario is possible but the MPC might wait another month to see how the Polish economy is doing. Friday’s reports (unemployment remained at 9.6% and retail sales increased by 14.2%) showed that a major slowdown will not happen soon. The EUR/PLN finished the week at zł.3.2030 (all-time low) while the USD/PLN at zł.2.0410.
