The zloty remains under pressure. Euro PLN 4.30 stays in the game

The Friday morning brought further weakness of the zloty. Despite the rather moderate message on the part of the NBP President, the euro exchange rate pulls a line of PLN 4.30 constituting the upper limitation of spring consolidation.

On Friday at 9:50 the euro exchange rate grew by half a penny, reaching PLN 4.2850. It can therefore be the sixth session in a row, when the Polish currency loses against the euro. From the beginning of June, the EUR/PLN exchange rate has risen by over 5 groszy.

It is therefore more and more likely that in the near future the EUR/PLN exchange rate will attack the 4.30 PLN line. It determines the upper limitation of the spring side trend and on the basis of technical analysis it is a clear resistance. An possible break of this level would imply an increase in the euro exchange rate around PLN 4.40. That is, the value unlisted since November 2023.

– Transferring the foot reduces may delay the weakening of the zloty in the 4,30 – wrote in the morning report economists of Bank Millennium.

During the extremely short Thursday press conference, NBP President Adam Glapiński did not take a clear position on further reduction of interest rates. The July reduction depended on the results of the new inflationary projection and the government's decision on electricity prices for households. At the June meeting, the Monetary Policy Council, as expected, did not reduce interest rates after a strong, 50-point reduction in May.

There were opinions among the economists that the council may not hurry with further reductions, which in the middle time would be a factor conducive to the strengthening of the zloty in relation to the euro. We would like to remind you that in Euroland the monetary policy soothing cycle is at its best and that on Thursday EBC once again reduced interest rates by 25 PB.

We are still waiting for decisions on the most important currency pair in the world. On Thursday, the EUR/USD exchange rate was close to the 1.15 level, which would open the road to the 4-year peaks from April. Historically, the weakening of the dollar correlated with the strengthening of the zloty against the euro. But since March this correlation has disappeared. On Friday morning, the dollar on the Polish market cost PLN 3.7431 and was 0.7 grosze more expensive than the day before. The USD/PLN exchange rate continues to move in the side trend and only a decrease below the line of PLN 3.70 would change the situation here.

The Swiss Frank was getting over a penny, reaching a price of PLN 4,5682. Also in the case of the Frank-gold steam, a side trend has been in force since April, with a range of PLN 4.50-4.60. However, close to breaking the mountain from this year's consolidation were the quotations of the pound-gold pair. In the morning, the British currency cost PLN 5,0785, and the day before the pound rate approached the 5.10 PLN line. So the upper restriction of the side trend in force since January.

KK

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