Trump’s conversation with Putin brings closer a scenario for ending the conflict in Ukraine. Today, the Polish złoty is on the defensive since the beginning of the day. However, investors will not be bored, as Thursday’s calendar features a lot of publications from various parts of the world.
Trump is going after his goal
At the end of the week, optimism is returning to the markets due to the conversation between the US president and his Russian counterpart. It is evident that the negotiations are gaining momentum. The fundamental question, however, is who will be happy with the end of the conflict, as it will certainly not please the Ukrainians. There is much talk about how a return to borders from before 2014 is practically impossible. Some voices also suggest that Kyiv could lose part of the territories lost after the outbreak of the war. Nevertheless, Trump could benefit, as he would achieve the success he has been touting. Information about the talks (even though they are taking place without the Ukrainian side or European representatives) has positively influenced the euro, which has approached the level of 1.04 against the dollar. A possible scenario for ending the conflict could invigorate the community’s currency and ignite a bullish trend on the EUR/USD pair.
Lower GDP, but still admirable
The national currency is giving back yesterday’s gains today. Everything started after 8:00 AM, when the PLN index faced difficulties in continuing its upward trend. A significant drop ensued, bringing it back to yesterday’s minimum levels. The GDP reading for the fourth quarter added to the woes of the national currency – the result was a respectable 3.2%, though slightly lower than analysts’ expectations of 3.4%. Nonetheless, the Polish economy has accelerated, as the third quarter’s figure was around 2.7%. A better result at the end of last year is also a positive indicator for the results this year. Cautious estimates suggest that Poland will achieve a GDP growth of 3.5%, but the Prime Minister’s vision assumes 4%. The EUR/PLN exchange rate is somewhat higher than yesterday, standing at 4.17, while USD/PLN is testing a support level of around 4.00.
Rich Calendar
Today’s calendar includes a lot of data. The day began with a flurry of publications from the British Isles. Notably, the GDP value for the fourth quarter came in higher than expected, at 1.4% compared to analyst forecasts of 1.1%. The GDP data for December also surprised positively, with a month-on-month result of 0.4%. At 8:00 AM, the CPI publication from our western neighbor was also released. Consumer prices dropped by 0.2% month-on-month in January. In terms of the year-on-year result, it was recorded at 2.3%, which is lower than the December figure of 2.6%. Deflation month-on-month was also observed in Switzerland, but neither reading had a significant impact on the EUR or CHF. There was also a batch of data from the American economy. A higher CPI might suggest that we would also see a higher dynamism in the PPI, and indeed that was the case. We received a figure of 3.6%, against expectations of 3.3%. Importantly, the dynamism is slightly lower than the previous month, which was at 3.7%. The situation in the US job market, measured by the number of new unemployment claims, remains good, as their number fell slightly compared to the previous week. The initial reaction to the data favored the US dollar, but after a short while, the USD returned to weakening against, for example, the EUR.
Author: Krzysztof Pawlak, currency analyst at Walutomat.pl
Source: https://managerplus.pl/negocjacje-w-sprawie-ukrainy-nabieraja-tempa-polska-gospodarka-przyspiesza-30929
