The zloty is weakening against the main currencies. The most expensive is the US dollar, which costs almost 4 cents more on Tuesday evening than on Monday.
On Tuesday, around 7 p.m., one euro cost PLN 4.46. – The zloty is weakening, as expected, but it is doing so very anemically. We are trying to reach the level of 4.47 for the fourth day in a row. These attempts have so far been ineffective, the volatility is low, so we are trying to weaken the zloty, said Mateusz Sutowicz, an economist at Bank Millennium, in an interview with the Polish Press Agency.
The American dollar cost approximately PLN 4.22, the Swiss franc PLN 4.72, and the British pound nearly PLN 5.13.
In addition, we are seeing declines in the main currency pair, Eurodollar, which means a weakening of the European currency. This is the result of good data from American economy.
“Preliminary PMI indices from the United States for October were published today at 15:45. The report was supposed to show a deterioration in the situation in the industrial and services sectors compared to the data for September. Moreover, it was expected that the services index would fall below the threshold of 50 points, marking the threshold between expansion and recession. The actual report turned out to be a positive surprise because both indices exceeded expectations,” we read in the commentary of the XTB brokerage house.
“Enthusiasm is fading a bit after the parliamentary elections”
According to Mateusz Sutowicz, the weakening of the zloty is influenced by, among others, precisely the strengthening of the dollar and the delay in the formation of a new government after the parliamentary elections in Poland.
– Enthusiasm is fading a bit after the parliamentary elections, the process of forming a new government encounters legal constraints, so it will be quite long. What the market was counting on, i.e. a quick unblocking of the National Reconstruction Program, will not happen quickly, if it will happen at all – said the economist.
– Of course, the euro/zloty is still at much lower levels than before the elections. In the following days, we expect that the PLN will continue its gentle weakening and an attempt will be made to reach around 4.49. This scenario should be supported by complications with the transfer of power, as well as changes in global markets. We are counting on the dollar strengthening in the coming days and the strengthening of market expectations that in December the Federal Reserve may even try to raise interest rates – added Sutowicz.
According to the economist, at the beginning of November, investors’ attention will shift to the meeting of the Monetary Policy Council and whether the Monetary Policy Council will change its narrative regarding the fight against inflation. The next decision-making meeting of the Monetary Policy Council is scheduled for November 7-8.
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