Central banks in the spotlight
Poland’s National Bank kept interest rates unchanged on June 2, joining the group of central banks that, amid geopolitical tensions, decided on a pause in monetary policy changes.
The escalation of the conflict between the United States and Iran has led many decision‑makers to reassess economic outlooks, taking into account the impact of high oil prices on inflation and the consequences of rising energy costs for consumers and businesses.
At the same time, events in the Middle East seem to play an increasingly smaller role in shaping investor sentiment. As FXMAG interviewee and currency analyst and dealer Adam Fuchs noted, market participants are reacting less and less to new reports from the region.
“They’re already fed up with the roller‑coaster and are increasingly ignoring the noise, in line with the trendy saying that they’ve already flipped the page from ‘Persian Gulf’ and are looking at entirely different impulses,” he said.
We wrote more about this in the article: Dollar and euro rates before the shock? Expert: “Investors are already fed up with the roller‑coaster.” Iran steps back. Here are the key events for USD/PLN and EUR/USD
Maciej Przygórzewski shares a similar view, chief currency expert at Currency One and operator of InternetowyKantor.pl and Walutomat.pl.
The expert noted that attention is focused on macro‑economic factors that were still in the shadows of geopolitical events a few weeks ago.
“When it comes to events, I think central banks and inflation readings are returning to favor. These readings, especially after Friday surprises from both sides of the Oder, show that both Poland and Germany have far fewer price‑growth problems than expected. As a result, the upcoming meetings of both the RPP and the EBC have lower chances of raising rates than before,” he observed.
Adding the growing chances that the Persian Gulf is closer to the end of the war than escalation, the world should even more so not expect rate hikes.
“How will this translate to currencies? Lack of hikes should weaken the currency. Additionally, a drop in risk should favor riskier destinations. As a result, if the EBC does not raise rates and the truce between the USA and Iran is signed, next week we could see a drop even to 4,20 for one euro,” summarized Maciej Przygórzewski.
Source: Bloomberg.
Also read: Dollar rate on a long road to 4 PLN? Expert issued forecasts for USD/PLN and EUR/USD. “The dollar could gain”
See also: Will the dollar surprise again? Expert issued a forecast for USD/PLN and EUR/USD. “It’s hard for me to believe there will be no more fires”
Dollar and euro rates on Wednesday, June 3
The dollar to zloty rate on Wednesday, June 3 is at 3,64 PLN.
Chart. Dollar to zloty rate (USD/PLN)
Source: Trading Economics.
The euro to dollar rate reaches 1,16 USD.
Chart. Euro to dollar rate (EUR/USD)
Source: Trading Economics.
The euro to zloty rate hovers around 4,23 PLN.
Chart. Euro to zloty rate (EUR/PLN)
Source: Trading Economics.
Also read: Dollar rate before a breakout? Expert: “Capital will flow back to USD”
See also: Dollar rate before a “nervous and dynamic” move, euro waiting for a drop? Expert issued a forecast for USD/PLN and EUR/USD
Source: Bloomberg.
