No breakthrough in the Middle East. The zloty reacts to global trends

The lack of a peace agreement with Iran slightly worsened market sentiment, but it did not translate into a significant weakening of the zloty. The euro exchange rate managed to stay below PLN 4.24 and thus remained close to the lower limit of the “war” sideways trend.

On Wednesday morning, the euro cost PLN 4.2367 and was half a grosz cheaper than the day before. In turn, on Tuesday, the euro rate increased by almost a penny, reacting to reports about the lack of expected peace talks between Iran and the USA. However, the EUR/PLN exchange rate remains only slightly above the lower limit (PLN 4.2250) of the sideways trend in force since the beginning of March.

Today, however, market sentiment has improved thanks to Donald Trump's extension of the truce with Iran, which maintains hopes for an end to the conflict in the Persian Gulf and unblocking the Strait of Hormuz. It is also visible that the zloty now reacts more strongly to global factors (oil, dollar, Middle East) than to unexpectedly strong data coming from the Polish economy.

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– In our opinion, in such an environment, the domestic FX market will wait for new impulses, and the EURPLN and USDPLN rates on Wednesday will consolidate in the range of 4.23-4.24 and 3.60-3.62, respectively – said PKO BP economists. “Following the cancellation of the second round of peace talks in Islamabad scheduled for Wednesday, the global geopolitical context remains unresolved and continues to be a key catalyst for volatility,” they added.

Meanwhile, the EUR/USD rate stopped above the USD 1.17 line, which on the Polish market meant the dollar was PLN 3.6059, i.e. 0.7 groszy cheaper than on Tuesday evening. This means stabilization of the dollar-zloty pair after the USD/PLN exchange rate was the lowest since the outbreak of the war with Iran on Friday.

The Swiss franc rate remained unchanged and was valued at PLN 4.6234 in the morning. However, the previous two days were marked by a rebound in the CHF/PLN exchange rate, which on Friday fell to the lowest level since February. After Tuesday's rebound, the British pound exchange rate decreased by 0.4 groszy, reaching PLN 4.8750.

K.K

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