The announcement of tariffs on steel and aluminum have become a reality, with a 25% rate on imports to the USA coming into effect on March 12. There is sizable demand for domestic assets, with EUR/PLN hitting consecutive lows. A surprisingly high CPI inflation reading in Hungary.Â
Tariffs on Steel and Aluminum Become a Reality – 25% from March 12 without exception
This information is nothing new, as tariffs on the import of steel and aluminum to the USA were predicted over the weekend. However, Donald Trump always stimulates thinking along the lines of “maybe he will change his mind”. There was no such case this time, and from March 12 the tariff rates on the import of the mentioned commodities will be 25% “without exception and without exclusion”. It must be admitted that some may feel cheated by this fact. It seems that the Australia’s Prime Minister boasted that the US president is considering concessions for his trading partners. However, it seems that there are no concessions, as Trump is not treating any country as his partner at this time. The imposed tariffs will less affect Australia, as their export of these commodities to the USA does not exceed 5%, but Canadians and Mexicans may have concerns. EUR/USD did not react to this decision and is still oscillating around 1,03.
High Demand for Polish Assets
Despite the lack of success on the domestic stock exchange last year, 2025 looks promising. There is visible appetite for Polish assets. Besides the stock market this is also the FX market and domestic bonds. As for the debt market, we see a noticeable drop from 6 to 5.75% for 10-years. The EUR/PLN rate has been breaking support levels since mid-January to find itself below 4.18 today. What is heating up the demand for domestic assets? The main theme is obviously the ending of the war in Ukraine. Our country would be the main player in providing aid to rebuild Ukraine. Monetary policy and maintaining high interest rates also contribute positively. Among the “fresh” topics, yesterday’s announcements of our government – massive investment and a staggering budget for this purpose.
Powell before Congress
Today the calendar of macroeconomic events draws attention primarily to the speech of the Fed’s boss in Congress at 4.00 pm, on the occasion of presenting a report on economic and monetary prospects. The analysts are wondering if there will be a small jab towards the new US president for causing economic uncertainty. Today, it is also worth paying attention to the high CPI inflation reading from Hungary. The expectations were at 4.8%, while the result settled at a whopping 5.5%. This is also much higher than the previous month (4.6%). The Hungarian Central Bank has maintained the interest rate at 6.5% four times in a row after previous cuts. It seems that this reading made the next meeting look dull, as there will be no changes in monetary policy. HUF is strengthening in the wider market today, as higher CPI may force the Hungarian Bank to keep the rates unchanged in the long term.
Author: Krzysztof Pawlak, Currency Analyst at Walutomat.pl
Source: https://ceo.com.pl/polskie-aktywa-na-fali-kurs-euro-na-kolejnych-minimach-49601
