The United States has announced sanctions targeting Russian oil. The move is intended to accelerate the U.S. President’s efforts to bring an end to the war beyond Poland’s eastern border. As a result, prices of crude oil surged sharply on the London and New York exchanges. The manoeuvre — signalling a stronger push toward ending the conflict — is supporting Polish assets and reinforcing the strong position of the złoty on the forex market. Meanwhile, the euro–dollar pair is once again testing an important support level.
Oil prices rebound
Oil prices opened with a strong upward gap today on both the London and New York markets and continued to move decisively higher. By midday, WTI crude climbed from USD 60 to USD 62 per barrel, while Brent advanced from USD 63 to USD 65.
The rally was triggered by the U.S. government’s announcement of sanctions against Rosneft and Lukoil — Russia’s two largest oil companies. These sanctions effectively block U.S. firms and banks from trading with or processing payments for those entities. Additionally, the U.S. President is working to pressure India to reduce its purchases of Russian oil. The goal is to cut financial inflows to the aggressor state and thus accelerate the end of the war.
This move is seen as a clear sign that Trump no longer trusts Putin’s assurances — something he has hinted at before.
The złoty awaits the end of the war
U.S. sanctions are not the only development moving the situation closer to a potential ceasefire in the east. European leaders, together with Ukraine, are working on a 12-point framework to suspend military operations. That narrative is directly benefiting Polish assets.
Let’s start with the złoty, which remains strong on the forex market. The EUR/PLN exchange rate is holding around 4.23. Equity investors are also responding positively — the Warsaw WIG20 index broke through 2,980 points today and is approaching the symbolic 3,000 mark. For comparison, trading on Monday opened around 2,900 points.
Capital inflow is also visible in the bond market, where yields are declining. And all of this is happening despite the concurrent strengthening of the U.S. dollar globally.
EUR/USD retests 1.157 again
A week ago, the world’s main currency pair formed a potential double-bottom pattern. Back then, the EUR/USD pair twice failed to break below the 1.155 level, and — according to technical analysis principles — then rebounded upward.
Many analysts pointed to the key support at 1.157 as the primary reason for the bounce, as this level had acted as major resistance just back in April.
After several days of gains, the chart has now turned down again. Today, the euro is trading below 1.16 against the dollar and is once more approaching the 1.157 support area. Does this imply the dollar is set to strengthen further?
Quite possibly — if tomorrow’s U.S. inflation data comes in higher than forecast (i.e. above an expected rise from 2.9% y/y to 3.1% y/y). Higher core inflation or the full reopening of the U.S. government would also likely support the USD.
If none of these factors materialize, however, the pair could rebound again — weakening the dollar instead. In the medium term, there are several bearish factors weighing on the greenback.
The most important is the expected interest rate cuts from the Federal Reserve — likely as soon as next week. While markets have largely priced in the cuts already, any dovish tone from U.S. policymakers would add pressure on the dollar.
The second key factor is the potential — though still unconfirmed — meeting between Trump and China’s leader in Seoul. If the meeting does take place but ends without progress, tariff-related tensions are likely to return. A renewed escalation of trade conflict could hurt the dollar, as FX investors are showing fatigue with tariff chaos, which in past episodes repeatedly pushed capital away from the U.S. currency.
Disclaimer: The information contained in this publication is for informational purposes only. It does not constitute financial advice or any other form of recommendation, is general in nature, and is not addressed to any specific individual. Before using this information for any purpose, independent advice should be sought.
Source: https://ceo.com.pl/spadek-zaufania-trumpa-do-putina-sluzy-zlotemu-75790
