The dollar is weakening ahead of labor market readings. The euro is still cheap compared to the zloty

On Tuesday, before the publication of important data from the US labor market, the dollar remained weak. The euro tried to make up for losses against the zloty after Monday's drop to the lowest levels since April. The Polish currency also weakened slightly in relation to the pound and franc.

On Tuesday, December 16, at 11:00, the exchange rates of the main currencies against the Polish zloty were as follows:

EUR/PLN: 4.2246
USD/PLN: 3.5908
CHF/PLN: 4.5122
GBP/PLN: 4.8192

The US dollar remained weakened ahead of the release of important labor market data. At At 14:30 the overdue labor market report for October and the current one for November will be published. U.S. employment rose by just 35,000 last month, according to a Reuters consensus. Weaker data could be interpreted by the market as potentially changing the direction of further Fed actions.

– Today's data from the US will certainly contribute to high dollar volatility. However, when analyzing the EUR/USD pair, pressure from the weakness of the euro must also be taken into account. Flash PMIs from the euro zone are worrying: while France has seen a return to expansion in the industrial sector, the services sector has almost slipped into recession. More importantly, in Germany we are observing the return of deep weakness of the industrial sector, which has the greatest negative impact on the prospects of the entire European economy. After the data, EUR/USD is oscillating close to the level of 1.1750, which is the highest since September – commented Michał Stajniak from XTB.

Similarly to Monday, the quotations of the American currency on the Polish market remained below PLN 3.60 on Tuesday. Before noon, the dollar was quoted at PLN 3.5908.

Shortly after 11:00 the euro was timidly trying to recover from its long-term low against the zloty. At that time, the EU currency was quoted at 4.2246 and was still near the lowest levels since April. The ECB is to decide on the interest rates on Thursday. It is expected to leave them unchanged for the fourth time in a row.

An upward movement was also visible on the GBP/PLN pair, where the rate at 11:03 was at the level of 4.8192. Similarly to the ECB, the Bank of England will meet on Thursday to decide on the further direction of monetary policy. The market expects a 25 bp cut in interest rates.

The Swiss franc was valued at PLN 4.5122, the same as on Monday morning. The Helvetic currency remained close to the lower limit of the consolidation ongoing since April. The CHF/PLN exchange rate has been in the range of PLN 4.50-4.60 for over 8 months.

Prepared by MM

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