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Euro, dollar, franc – zloty, quotations 07/06/2023. Comments

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The zloty weakens against the main currencies on Thursday before noon. The Polish currency has been losing “the hardest since February 2023, waiting for the Monetary Policy Council and the new projections to cut rates in the fall,” wrote Daniel Kostecki, chief market analyst at CMC Markets Polska. In the opinion of economists, in the coming weeks it is possible that the zloty will continue to depreciate.

On Thursday around 10 a.m. you had to pay PLN 4.47 for a euro. You had to pay PLN 4.12 for the US dollar and PLN 4.59 for the Swiss franc. Daniel Kostecki, chief market analyst at CMC Markets Polska, pointed out that “the zloty has delighted us with its strength for many months, but every trend is interrupted by corrections, and from time to time it can also reverse.”

“The dollar exchange rate increased by 1.4 percent last week. This is the biggest gain dollar quotes from the beginning of February 2023. The euro exchange rate is increasing by almost 0.8 percent until Thursday morning. since the beginning of the week, which is also the largest increase since February 2023.

The analyst noted that although in terms of the entire zloty strengthening trend, the current increases in the dollar or euro exchange rates are not significant, their dynamics seem to be important. “A quick sell-off of PLN within one week, combined with the not-so-great last session on the WSE, may indicate that foreign capital is leaving our market,” he assessed.

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Awaiting decision of the Monetary Policy Council

Economists emphasize that on Thursday the event of the day on the domestic market will be end of the meeting of the Monetary Policy Council. Economists expect the MPC to remain unchanged interest rates. However, the communiqué after the meeting will contain information on the NBP’s July projection for inflation and gross domestic product (GDP).

“Thursday promises to be interesting on the financial markets. Locally, investors’ attention will be focused on the publication of the communiqué summarizing the July meeting of the Monetary Policy Council. It will contain fragments of the latest macroeconomic projection. Its meaning may shape the medium-term monetary outlook. We assume that the tone of the ending Today’s meeting, as well as tomorrow’s conference of the NBP president, will remain mild, which is already largely reflected in market valuations.

“Taking into account the balance of risks, we see the possibility of a continued weakening of PLN in the coming weeks towards 4.15 for USD/PLN and 4.52 for EUR/PLN, especially if the local maximums from June this year are at 4.12 and 4.49 respectively would be defeated,” PKO BP economists assessed.

“The most important event of Thursday’s session will be the MPC decision-making meeting. There are no indications that the Council will change interest rates by the end of Q3 2023, while the publication of a commentary to the July decision may be a positive signal. The basic assumptions of the new projection will be presented in the justification NBP inflation rate, which this time may be adjusted downwards,” wrote representatives of the largest bank in Poland.

According to analyst Daniel Kostecki, “the zloty may also not be helped by the very hawkish attitude of the Federal Reserve USAA hawk is someone who prioritizes keeping inflation low, while a dove is someone who is in favor of lower interest rates.

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