The first month anniversary of Donald Trump’s inauguration as the 47th President of the United States is marked by a recovery from yesterday’s strengthening of the dollar. However, this does not mean that the geopolitical situation is stable, as evidenced by the successive increases in gold. In the background, data from the domestic economy.
Dollar Surrenders Gains
After yesterday’s risk aversion, forex is relatively calm. This means that markets have begun to get used to the tense situation associated with the end of the war in Ukraine or the US president’s considerations on tariffs on cars, semiconductors, and drugs. The improvement in sentiment is also the result of positive statements made by Trump about his excellent relationship with the President of the People’s Republic of China, as well as a possible new trade deal with China.
As a result of the improvement in sentiment, the US dollar surrenders some of the gains made on Wednesday. Last night, the world’s primary currency pair reached 1.04 USD. However, the support that coincides with the line of February’s upward trend has not been broken. On Thursday afternoon, the EUR/USD exchange rate returned to 1.044. The zloty, which is negatively correlated with the “greenback”, takes advantage of today’s weakening. The PLN makes up for yesterday’s losses, pulling the EUR/PLN rate below 4.16 PLN. The USD/PLN chart is back to 3.98 PLN, GBP/PLN is below 5.03 PLN, while CHF/PLN is below 4.42 PLN.
Barometer of Risk
The measure of geopolitical nervousness in the markets remains gold. Amidst the ongoing chaos, we are reaching new highs. Today’s historical record is 2,955 USD per ounce. This means that the media barrier of 3,000 USD is within reach. Moreover, in the media, we can find further upward forecasts for the valuation of this noble metal. Goldman Sachs Group Inc. has already raised its target for the end of the year to 3,100 USD per ounce. The reasons remain the same – purchases made by central banks and inflows of funds into ETF funds backed by gold. The consequence is Wall Street’s continued enthusiasm for this metal. The rapidly changing geopolitical situation also argues in favor of gold, which is considered a safe haven. As large capital dislikes instability, part of the portfolio of large players is invested in this asset.
Data from Poland
Today’s macroeconomic calendar included several significant readings from the domestic economy. Certainly, a positive surprise was the 4.3% y/y increase in construction and assembly production. With expectations at 0.9% and the previous reading of -8%, this is a significant leap in the surveyed industry. Industrial production recorded a forecast decline of -1%. Employment also fell (-0,9% y/y). Looking at wages, we note their slower growth (9.2% y/y, previously 9.8% y/y). Producer inflation stays negative, but -0.9% y/y is an increase compared to the previous reading (-2.7% y/y). Mixed data had no significant impact on the zloty, which today is subject to external factors.
Author: Dawid Górny, currency analyst at Walutomat.pl
Source: https://managerplus.pl/cena-zlota-na-rekordowych-poziomach-goldman-sachs-podnosi-prognozy-68977
