Last week was marked by domination of the Euro over the US dollar, highlighted by Friday’s data on the fall in retail sales in the US. In this environment, the Polish zloty gained, maintaining its strength on Monday, despite a slight strengthening of the US currency.
Mixed data from the States
On Friday afternoon, we learned mixed data from the US economy. Retail sales rose by 4.2% y/y. However, this was a decrease compared to the previous reading of 4.4% y/y. On a monthly basis, a decrease of 0.9% was also recorded, which was deeper than the -0.1% forecast. However, industrial production results were better. On a yearly basis, a growth of 2% was noted, compared to previous 0.5%. On a monthly basis, the increase of 0.5% was above the consensus of 0.3%. Ultimately, investors gave more weight to the deterioration in sales, which weakened the American currency. On Valentine’s Day, the EUR/USD rate rose from 1.045 USD to 1.051 USD. This also marked the return of the main world’s currency pair to the highs of this year from the end of January.
Absence of Americans does not weaken either the dollar or the zloty
On Monday, we observe a rebound of Friday’s USD losses on the Eurodollar. The EUR/USD rate fell to 1.047 USD after 14:30. Interestingly, the dollar is holding its ground despite today’s absence of Americans, due to the observance of Presidents’ Day in the US. The echos of the security conference in Munich over the weekend remain in the market. From US announcements, it is clear that the country plans to independently conduct negotiations with Russia about the conflict in Ukraine, bypassing our eastern neighbor and marginalising the position of the rest of Europe. In this environment, the zloty is holding up well, showing that it will not easily give up last week’s gains. Despite Monday’s strengthening of the dollar, the local currency maintained the level of 4.16 PLN on the EUR/PLN chart at 14:30. The USD/PLN rate is 3.97 PLN, GBP/PLN equals 5 PLN, and CHF/PLN trading is 4.40 PLN. The zloty is supported not only by the possibility of the end of the war but also by the remaining hawkish position of the Monetary Policy Council, indicating no interest rate cuts in Poland in the upcoming months. This thesis was supported by Friday’s consumer inflation reading. Its jump to 5.3% y/y even exceeded the growth expectations of 5%.
Quiet start to the week
Today’s macroeconomic calendar lacks significant data. The most interesting include Japan’s GDP growth, coupled with a decrease in industrial production. It will become more interesting in the second half of the week. Already on Wednesday – inflation data from the UK and the minutes from the FOMC meeting. On Thursday, in addition to a package of data from the domestic economy, we will learn about the decision on interest rates in China. On Friday, the calendar will be supplemented with the latest PMI readings for the industry and services, from European economies as well as the US. If tomorrow’s return of the Americans to the game does not increase market volatility, the numerous publications in the second half of the week will certainly do so.
Author: Dawid Górny, currency analyst at Walutomat.pl
Editor: CEO.com.pl Editorship
Source: https://ceo.com.pl/zloty-trzyma-sie-mocno-kurs-dolara-odbija-ale-bez-wiekszego-wplywu-na-pln-59584
