Tuesday is another terrible day for the zloty. All major currencies are becoming more expensive: euro, dollar, pound and franc. According to economists, the Polish currency may continue to weaken in the coming days.
On Tuesday after 10.30 the euro costs 4.65 zlotys, the dollar – 4.10 zlotys, the Swiss franc – 4.42 zlotys and the British pound 5.52 zlotys.
Zloty – quoted on November 16, 2021
Zloty exchange rate – comments
Santander Bank Polska wrote in the report that the EUR / PLN exchange rate after inflation data (with higher prices per month) for a moment it fell to 4.6250, then rebounded to 4.64, and on Tuesday morning it opens at 4.65. “The zloty may continue to lose in the coming days. The data on the balance of payments reminded the market of a fundamental change to the detriment of the zloty,” he added.
Bank Millennium economists also expect the unfavorable trends for the euro to persist.
“The zloty is struggling to stay below a significant technical barrier, i.e. the level of 4.6328 per EUR, although the fiasco of yesterday’s attempt to strengthen the Polish currency does not bode well for its strengthening in the coming days. – less – Hungarian forint, where real interest rates remain higher than in Poland (today the decision on the cost of money will be made by the Hungarian central bank). Therefore, a difficult time ahead of the zloty. on the forex market “- they assessed in the report.
Przemysław Kwiecień, chief economist of the XTB brokerage house, also commented on the situation on the currency market.
“Yesterday in the morning comment we were wondering if the seasonally good end of the year could help our currency in the near future and why it is different this time. The next 24 hours brought another, almost avalanche weakening of our currency” – the expert wrote.
“Historically, usually when we have a weakening of the euro against the dollar, the zloty loses even more against the US currency, and this has been the case in recent days. Why is the dollar gaining? The US interest rate market speculates that the Fed will have to raise rates sooner, and because such a topic is almost non-existent in the euro zone (the market tried to make such speculations, but they were cut by the ECB) the dollar gains against the euro “- he noted.
As he emphasized, the market in Poland expects rapid interest rate hikes to around 3%, and this should help the zloty. “The fact is that usually in the currency (especially in the short term) the global factors dominate the local ones, but here too not everything seems to be correct. Speculation about faster rate hikes in the US should cause worse sentiment in the markets, and it is not. Despite more than 6 percent of inflation in the US stock indices are at record levels, which by the way should also support the zloty, and as we can see – it is not happening “- emphasized the analyst.
April added that “There is also a political and geopolitical thread. The communication of the NBP and the tension on the border with Belarus are indicated.”
“In my opinion, in my opinion, deeds are more important to the market, and here we have started the process of rapid rate hikes. Geopolitical issues, in turn, usually have a very short-term impact and I do not think that they are crucial now. The fact is, however, that such a scale of zloty depreciation may seem puzzling and this causes attempts to look for various explanations. What is worrying is that the possible ‘turn’ in the Fed’s policy (and its consequences for broad markets) has not really happened yet, and its appearance may pose a significant threat to the zloty “- he explained.