USDPLN remains high
Friday brought an attempt to gently strengthen the zloty, but key issues remain unresolved. The first thread is the Iranian issue - sixty‑day negotiations have begun, though not without additional tensions around the Strait of Hormuz.
Ultimately, however, it was not fully closed, which markets accepted as a good coin - oil that opened higher on Sunday night later gave back the entire rise.
It is clear, however, that the ceasefire is fragile, and Israeli actions in Lebanon (which in no way participates in peace talks) do not help. If markets stop believing that oil prices can stabilize in the coming months, they will become nervous due to expectations about inflation and central bank actions.
The second topic is the FED - after last week’s meeting the market sharply increased estimates of interest rate hikes this year - even two moves of 25 basis points are expected.
- in September and December. This gives strength to the dollar, but helps emerging market currencies. The fact that the zloty is trying to stabilize a bit may be due to the fact that despite expectations of tightening monetary policy in the USA, sentiment in global equity markets remains basically decent.
The fate of the zloty PLN depends on oil and dollar strength
On Monday morning (9:30) the Central Statistical Office published a series of data for May - attention is drawn to the increase in wage dynamics to 5.8% YoY from 5.4% YoY, although 6.0% YoY was expected, or retail sales dynamics to 4.4% YoY from 2.8% YoY (forecast 5.3% YoY).
This draws a moderately positive picture of the economy, and for the prospects of RPP movements on interest rates, or changes in the zloty, today’s message from the CSO is basically neutral.
Further development of events will therefore depend on the two threads mentioned earlier (the Iran issue and the Strait of Hormuz, and the strength of the dollar in major markets). If this weakens, the zloty will automatically react (possible drop of USDPLN below 3.70).
Daily EURPLN chart
Daily USDPLN chart
