Yesterday’s macroeconomic data from both sides of the ocean supported the dollar. Data from Poland helped the złoty. Meanwhile, Turkey, by raising interest rates to fight inflation, led to the strengthening of the lira.
Data from Poland
Yesterday we learned of two important readings from Poland. On one hand, there was the construction and assembly production, which fell by 4.9%, a result weaker than the expected drop of 2%. On the other hand, retail sales, which grew by 6.7%. Here, expectations spoke of a rise by 6.2%. We therefore have a positive and negative surprise published at the same moment. Markets, however, considered retail sales a more important piece of information. Proof of this is the strengthening of the złoty after these data.
Dollar recovering losses
Yesterday we learned of two very important readings explaining the sudden flow of capital across the ocean. The first was the German PMI index for industry. Pessimism in the German economy is basically nothing new. Since June 2022, there has been no advantage of positive responses. The scale of pessimism, however, is again growing. Only 41.6% of respondents now give positive responses about the future (excluding neutral responses). With such an attitude, it’s hard to expect a special improvement in the situation. On the other hand, in the USA, 52.5% of respondents spoke positively. If we add to this against the backdrop of decent labor market data and good real estate market data, yesterday’s strength of the dollar should not surprise us. The US currency gained about 0.75% in value and after today’s morning changes, it is the strongest against the euro since the first days of March.
Turkey unexpectedly raises interest rates
Ever since it began regularly devaluing the Turkish lira against the dollar, Turkey has become more predictable in terms of currency. This doesn’t change the fact that the central bank’s decisions can still surprise. This was the case yesterday when interest rates were raised from 45% to 50%. Yes, there is no missing comma here, it is indeed a 50% interest rate. The rate hike is related to the still very high inflation in this country, which has just risen to 67% and this is the fourth consecutive month of increase. The decision itself led to approximately 1.5% strengthening of the Turkish lira against the dollar.
Maciej Przygórzewski – chief analyst at InternetowyKantor.pl and Walutomat.pl
