A healthy job market in the USA combined with weak orders from the Community’s main economy have led to fluctuations in the world’s main currency pair. Ultimately, the euro cannot find the strength to resist the rising dollar. This is badly tolerated by the Polish złoty. In Switzerland, consumer inflation is on the rise.
Data from the USA
Let’s start with Friday’s edge wobble. For the first half of the day, the euro-dollar exchange rate fluctuated in the range of $1.09-$1.092. At 14:30 the EUR/USD rate slipped to $1.088. This was the effect of good payrolls, indicating greater employment change in the private and non-farm sector. Moreover, the unemployment rate remained at 3.7% (despite expected growth). The strengthening of the “greenback” didn’t last long, as soon it started to bounce back quickly, which at 16:00 was amplified by a drop in the value of the ISM index for services in the USA. A score of 50.6 points (previously 52.7 points) approached the 50-point boundary separating growth from recession. The decline of the index led to a sell-off of the dollar, boosting the EUR/USD rate to $1.099.
The “greenback’s” response
The end of Friday’s session on the “edge” is a time for the overseas currency to make up for losses. On Monday, the world’s main currency pair still indicates the strength of the dollar. From the very morning, we are below the level of $1.094, which twice failed to overcome. The common currency isn’t helped by the morning readings of orders in the industry in Germany indicating a decrease of 4.4% year on year. The monthly set at 0.3% (with an expected one-percent increase) is also a poor result. In addition, the Sentix Index (-15.8 points) also performed worse than expected. In the deteriorating EUR environment, the PLN is managing poorly, losing to the euro, dollar, and franc. The EUR/PLN rate around 10:00 reached 4.355 PLN, and the USD/PLN rate is 3.985 PLN.
In Switzerland, a rebound in prices
On Monday early in the morning, we learned the reading of consumer inflation in Switzerland. The CPI index returned to 1.7% (previously 1.4%). This isn’t a level at which the rise in prices is burdensome and anyone could dare to argue that it provides a strong impulse for the Swiss decision-makers to consider raising interest rates. Despite this, the symbolic jump in CPI strengthened the franc on the broad market shortly after the data publication. The złoty was unable to cope with the appreciation of the CHF. The CHF/PLN rate today is rising and at 10:00 it is above 4.68 PLN.
Today in the macroeconomic data calendar it’s worth paying attention to:
11:00 – eurozone – retail sales.
Dawid Górny – currency dealer at InternetowyKantor.pl
