fot. Exchange rates 04/15: Euro outperforms – Dollar launched – New record for EURUSD for this year! Find out the cost of the Franc, Dollar, Pound, Yen, Forint, Euro and Czech Koruna today
Thursday brought a noticeable weakness in the zloty against the dollar, which was evident in the rise in the USD/PLZ exchange rate during the session, temporarily even by about 0.06 PLN above the 4.30 level. This move was mainly caused by the drop in the EUR/USD exchange rate below the 1.08 level.
The main event of the last session was the European Central Bank meeting
As expected, there were no changes in monetary policy parameters, but the statement did not live up to hawkish market expectations. The European Central Bank has suggested that the asset purchase program will be completed during the third quarter, and expectations that the program will expire at the end of June have been increasing recently. Additionally, during the conference, CEO C. The market expected a full rise of 25 basis points. Already in September, and throughout 2022, the deposit rate changes by 50 basis points. This disappointment had a negative impact on the price of the euro, and the EUR/USD pair recorded from levels above 1.09 a new low this year near 1.0750.
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The zloty was similar to other currencies of the Central and Eastern European region, that is, the krona and the forint. Regarding the euro, the change in the Central and Eastern European currencies was moderate, with the exchange rate of EUR / Polish zloty still hovering at 4.64. However, the strong decline in the EUR/USD pair put pressure on the entire region. The data on Polish inflation to be published in the coming days should not significantly affect the zloty. With the possible decrease in liquidity in the Easter period, we expect that the correction of the recent increase in USD/PLZ from around 4.30 to 4.25 will not be immediate.
The main event in the European interest rate market on Thursday was the European Central Bank meeting
The absence of changes in the discourse preferred the stabilization of the citation. What lifted the yield curves in the world was the publication of strong data in the US and the statement of J. Williams from the Federal Reserve, who said that a 50 basis point rate hike should be considered. At the May meeting (at the same time return to the neutral rate until the end of the year). As a result, the session ended in Poland and the world with an increase in yield curves.
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Investors react quickly to emerging information, but interestingly enough, even in the absence of major events, there are sudden changes in sentiment. In recent days, no information has emerged that would give a strong fundamental signal portending a change in trend. One can even get the impression that central banks around the world are tightening their monetary policy aggressively, plus they are verbally maintaining high market expectations of the next steps. Despite some easing in quotations, commodity markets are also seeing a trend of increasing commodity prices, especially agricultural ones.
Combined with supply chain disruption, it will maintain high inflationary pressure in the second quarter of 2022
In such a case, it is difficult to count on a change in the current uptrend, and keeping the yield of Polish bonds just under 7% is the base scenario now. Friday’s latest release of domestic inflation may be a short-term risk factor. Given rising commodity prices and other inflationary factors, an upward revision for a quick read cannot be ruled out. The data may also show an increase in core inflation, supported by a stronger monetary response from NBP.
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