The euro exchange rate fell by 1 percent to approximately PLN 4.61, and the dollar by 1.1 percent to approximately PLN 4.30. According to analysts, the behavior of the Polish currency was influenced by two factors: one of them was the data on inflation in the USA, and the other was the statement of the president of the Polish Development Fund, Paweł Borys.
In the afternoon EUR exchange rate/PLN drops by 1.05%. to 4.6122. USD/PLN goes down by 1.14%. to 4.2973.
EUR/USD increases by 0.09%. to 1.0733.
Currencies and inflation in the USA
– Today was the key event of the week inflation consumer market in the United States, which turned out to be slightly above expectations. There was high volatility on the currency market moments before and after this reading. The key question remains whether the DXY index will break above 105 and the EUR/USD rate will fall below 1.07. There is no decision at the moment – Sobiesław Kozłowski, director of the analysis and consulting department at Noble Securities, told PAP Biznes.
He added that the zloty was trying to strengthen against the dollar. – At the moment we are trying to get back below 4.30, but it is still an attempt – he said.
The US Department of Labor reported that consumer prices (CPI) in the US increased by 3.7% in August. on a y/y basis, and m/m increased by 0.6%. Expected +3.6%. y/y and +0.6 percent mdm. Core inflation, i.e. an indicator that does not take into account fuel prices and food, increased by 0.3%. mdm and 4.3 percent rdr. Expected +0.2%. mdm and +4.3 percent rdr.
On Wednesday around 3 p.m., the US dollar index, which tracks the strength of the dollar against a basket of major currencies (DXY), was around USD 104.5.
PLN exchange rate on Wednesday
Before noon, PFR president Paweł Borys told Bloomberg that the zloty had weakened beyond the optimal level and the central bank should take exchange rate issues into account in its decisions. According to Boris, optimal PLN exchange rate is in the range of 4.4-4.6 to the euro.
After this statement, the EUR/PLN exchange rate dropped sharply from approximately 4.66 to approximately 4.625. In the afternoon, the zloty strengthened further, to approximately 4.61.
On Wednesday, investors also learned data from the domestic market regarding the balance of payments in July. The National Bank of Poland reported that the current account surplus in July amounted to EUR 566 million compared to the consensus surplus of EUR 1,275.0 million. Exports increased by 1.3%. y/y, in line with the consensus, and imports decreased by 8.9%. compared to the expected decline of 7.1%.
The zloty has been losing since last week, after a much larger than expected reduction in the Monetary Policy Council’s rates.
The Monetary Policy Council reduced rates by 75 bp last Wednesday, while market expectations were 25 bp.
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