The Prospect of a U.S. Government Reopening Doesn’t Necessarily Strengthen the Dollar. Weak U.S. Labor Data Sends a Warning to Investors, While the Polish Zloty Holds Firm. The Swiss Franc Rises on Trade Deal Hopes.
Tuesday’s Dollar Weakness
News about the potential end of the longest government shutdown in U.S. history has not strengthened the American currency. Just yesterday, the weakening of the “greenback” pushed the world’s main currency pair up to 1.16 USD. For comparison, only a week ago, one euro bought 1.147 dollars.
Why is the dollar losing value despite hopes of a U.S. government reopening? The sharp move was triggered by weak data from the ADP employment report. While private-sector employment (excluding agriculture) rose by 42,000 in the past month, weekly job reductions reached 11,000. Investors paid more attention to this latter figure, highlighting the deterioration in employment conditions toward the end of last month.
Another concern also emerged: once the government officially reopens, macroeconomic data from public institutions will begin flowing again. If those reports confirm the U.S. economy’s fragility, it could give the FOMC a stronger case for lowering interest rates — a move that would, in theory, weigh further on the dollar.
The Zloty Remains Resilient
Following Tuesday’s dollar sell-off, markets began to cool off. By Wednesday morning, the EUR/USD exchange rate had returned to pre-ADP levels, hovering around 1.158 USD as of 1:00 p.m.
Meanwhile, final inflation data from Germany came in as expected, showing a 2.3% year-on-year and 0.3% month-on-month rise in consumer prices. These readings had limited impact on the world’s main currency pair compared to the previous day’s U.S. data.
The local dollar weakness has favored the Polish zloty, which remains strong on the forex market. At the time of writing, the EUR/PLN rate stands at 4.23 PLN, while USD/PLN trades around 3.65 PLN. This indicates that the zloty is weathering the global currency fluctuations remarkably well.
The Pound Struggles, the Franc Shines
The zloty looks even stronger against the British pound. Since yesterday, GBP/PLN has been declining, pushing the exchange rate below 4.80 PLN. However, this move isn’t just about the zloty’s strength — the British currency itself has come under heavy pressure after disappointing macroeconomic releases.
Unemployment in the UK rose more than expected, climbing to 5% versus forecasts of 4.9% (up from 4.8% previously) — the highest level since May 2021. This coincided with a surge in jobless claims: instead of the projected increase from 0.4k to 20.3k, the actual number hit 29,000 in October.
The weak labor market puts pressure on the Bank of England to consider rate cuts. However, stubborn consumer inflation remains a major problem, holding steady at 3.8% year-on-year in the second half of 2025 — well above the BoE’s 2% target. The combination of high prices and a weakening economy continues to drag down the pound on global markets.
The Swiss Franc Gains Ground
On Wednesday, the zloty weakened only against the Swiss franc, as CHF/PLN rose above 4.57 PLN. The franc’s strength stems from speculation about a potential trade agreement between Switzerland and the United States. Reports suggest that customs tariffs could be reduced from 39% to 15%, fueling optimism among investors.
This news has boosted the franc not only against the zloty but also across global forex markets.
Source: CEO.com.pl – Złoty mocny wobec dolara i funta, traci jedynie do franka
