On Thursday, the zloty makes up for some of the losses from Wednesday. However, in the near future the dollar may continue to strengthen and the euro may weaken. This will not be favorable for the Polish currency, economists believe. Stock markets in Europe are mostly rising. Investors' attention is shifting from Donald Trump's victory to the decisions of central banks, including the US Federal Reserve.
“Despite the significant shifts in the FX market that have taken place in recent weeks, it does not seem that the markets have fully assessed the possible consequences of the absolute victory of the Republican Party in the elections that ended on Wednesday,” PKO BP economists wrote in the report.
What will be the zloty exchange rate?
“This means that the pressure on a stronger dollar and, among others, a weaker euro may continue in the near future, which in the next few days could push the USD/PLN exchange rate closer to the technical resistance zone at 4.11-4.12, while maintaining the exchange rate EUR/PLN in quite wide consolidation between the levels of 4.33-4.38,” they added.
Bank Millennium economist Mateusz Sutowicz, in turn, estimates that there may be attempts on the market to reverse current trends.
“Financial markets are actually settling in to the new US president (although formally the change of power will not take place until January 20 next year). In our opinion, investors may now enter the phase of 'buy rumors, sell facts', i.e. attempts to reverse current trends,” he wrote in economist's morning report.
“Such conclusions are provided by today's strong opening of the zloty, which is attacking the level of 4.3380, i.e. an important technical level. The eurodollar is also trying to make up for the decline, which fell by 2% yesterday.” – he added.
Dollar exchange rate around 10.00 dropped to PLN 4.03 (-0.6%), while the euro – PLN 4.34 (-0.3%), the franc – PLN 4.60 (-0.6%), and pound – to PLN 5.21 (-0.3%).
Situation on the markets
On Thursday morning, bitcoin is falling in price and gold is gaining, brokers say. However, slight increases can be seen on European stock exchanges. The Stoxx Europe 600 index increases by 0.23%. The FTSE 100 increases by 0.17%. CAC 40 is 0.07 percent lower. DAX goes up by 0.89%.
Investors are shifting their attention to the decisions of central banks, including the Fed. Central bankers are expected to USA will decide to reduce the Fed reference rate by 25 basis points.
Investors will be looking for information on how Fed bankers view the impact of Trump's potential tax cuts and tariff increases on the prospects for global economic growth and inflation.
– Fed Chairman Jerome Powell's comment on the current economic situation and how the new US president may affect the outlook will be of great importance to investors – says Michiel Tukker, investment strategist at interest rates at ING.
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