What happened with the EUR/PLN, EUR/USD, and USDPLN pairs?
The main factors supporting the dollar and increasing pressure on EM currencies were a rise in risk aversion after the global sell‑off of AI‑related stocks and the persistence of Fed rate‑hike valuations. Additionally, the EUR forces did not support the business‑cycle index readings from the major European economies, which were mixed.
This caused the EURUSD rate to fall below the technical support slightly above 1.14.
It is worth noting that the dollar index (DXY) breached the upper limit of the sideways trend building since mid‑2025, which, if the move continues, would open the way for further USD appreciation. In such an environment the zloty remained under pressure, resulting in the EURPLN rate approaching its local peak at the end of March.
For USDPLN, the technical resistance zone between 3.7350 and 3.7550 was breached, which, if the breakout holds, could open a path toward 3.86.
Euro rate – forecast for the coming days
The Wednesday macro calendar does not contain key figures for market sentiment, and the Ifo Institute index reading for June will likely have limited impact on the EUR strength.
In our view the zloty will remain influenced by global factors and their accompanying trends, which will generate global risk appetite and a dollar that is negatively correlated with EM currency strength.
As we indicated above, key technical levels on EURUSD, the dollar index, and USDPLN have been breached, and the durability of these breakouts will be decided by the PCE inflation data published in the US on Thursday, which indirectly affects the USD.
Until the release of this data we assume the EURPLN and USDPLN rates will remain near Tuesday levels.
Interest rate market
On the domestic interest‑rate market, the Tuesday session brought a decline in bond yields following global trends. Bond valuations were strengthened by a global increase in appetite for safe assets, the expected reduction of Hungarian MNB rates, and a visible decline in energy commodity prices in recent days.
The most interesting event in the country during the Wednesday session will be the regular bond auction. The Ministry of Finance will offer securities worth between 7 and 12 billion PLN. Given the visible improvement in local debt market sentiment, sales close to the upper end of the range can be expected. It is worth noting that in the last auction demand exceeded 18 billion PLN, confirming the rebuilding demand. The auction’s impact on the debt market should be neutral.
Although in the coming months we expect a further moderate decline in bond yields, in the short term, with a quiet macro calendar and high valuations, we see a more likely stabilization of bond yields. 2‑year yields should stay around 4.30%, while 10‑year yields near 5.45%.
In the context of broader regional changes, the Tuesday reduction of Hungarian MNB rates and the announcement of a continuation of the cycle into the holidays pushed Hungarian bond yields lower. Nevertheless, it seems the market has largely priced in post‑parliamentary election changes and the possible scale of monetary easing in Hungary. The 10‑year yield remains about 20 bp below Polish counterparts and slightly above 50 bp above Czech ones. Relative valuation suggests that the space for further decline in Hungarian bond yields is shrinking.
