The Polish zloty is once again showing its strength. Some analysts, in addition to highlighting the standard freezing of National Bank of Poland’s (NBP) stance, indicate that the announcement of deregulation could have currently been of help. Despite the anticipated sanctions, crude oil is rebounding. Turkey is demonstrating good data.
Sanctions were supposed to lower the oil prices
Many analysts suggested that the sanctions recently imposed by Donald Trump would lead to reductions in oil prices. The reason behind this forecast is that it should curb economic activity and make domestic consumption more cost-efficient, thus limiting transport. We indeed observed such a move in the market. Since the inauguration of the new president, the price of a barrel of Brent oil fell from about 81 USD to 74 USD. Despite further sanctions being announced, we have seen increases reaching 3 USD in the last few days. The next several days will tell us whether we are dealing with a correction of this movement or a lasting rebound. It should be remembered that some of the extraction in the US, from shale, carries very high costs. As a result, the Trump administration is not actually interested in cheaper oil.
Deregulation in Poland?
Yesterday, there was a peculiar declaration from the Prime Minister, who proposed to one of Poland’s leading entrepreneurs to establish a deregulation team. This proposal was accepted. Looking at market reactions, some people are treating it as if the Polish laws were already rationalised. The past track record concerning such initiatives is not particularly impressive, although the market reaction was quite positive. It seemed that there was no room for further strengthening where the Polish zloty stood. However, it turned out there was more, and we again improved recent lows on the EURPLN exchange rate, momentarily even getting close to 4.17 zł.
Good data from Turkey
Turkey’s return to proper economic tracks is taking a long time. However, yesterday’s data show that the trajectory is correct. Unemployment at 8.5% rises some concerns. It must be remembered that this is the lowest result since November, but of 2012. Industrial production also performed very well. An annual growth of 7% is not very much for an economy in the situation of Turkey’s. It is the best result in almost a year. So how is the Turkish lira reacting? This steady devaluation of the currency, which within a year lost over 17% of its value compared to the US dollar exchange rate, is the reason for these successes. It has allowed the competitiveness of local production to be regained.
Today there are no significant macroeconomic reading in the calendar.
Maciej Przygórzewski – Chief Analyst at InternetowyKantor.pl
Source: https://ceo.com.pl/kurs-euro-ponizej-418-ropa-naftowa-odbija-pomimo-zapowiedzi-sankcji-46488
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