The end of last week brought a slight strengthening of the dollar, which made possible USDPLN pair to return above the level of 4.00. Coming days could bring a new wave of purchases of the US currency, as in the calendar are planned several extremely important events. Equally interesting is going to be the market of PLN, which will be heavily influenced by domestic factors.
Last week was fairly quiet in terms of economic data, and greater market volatility was caused by political factors. Once again, market-started Donald Trump, who announced that in the next two or three weeks we will know the details on the progress of work on tax reform. This made the dollar catch awaited impetus to strengthening and US indexes climbed to new historical highs. This week, the US currency will continue to be the focus of the market because of the hearing Janet Yellen (President FED) in Congress and readings of inflation – both events will take place on Wednesday. In addition, we will know a series of macroeconomic data from the UK, which could lead to major movements on both pairs with pound and dollar.
In case of Polish zloty in last few days consisted primarily events from abroad, but also helped Friday’s statement of Jaroslaw Kaczynski on loans in swiss francs. Lower risk of conversion loans in CHF caused a rally in the banking sector and a warmer climate around our domestic currency. In the coming days in to the game will enter macro data, as published reports will be key for our economy.
Today we will know the data on the growth rate of prices in January and all indicates that the prices considerably accelerated. It is true that the current rebound in inflation should not trigger a response from the Monetary Policy Council, but may affect the strength of the Polish currency. Especially, if the data from consecutive days (GDP, industrial production, wages, employment) will prove to be better than expected. The first hours of trading this week, however, bring PLN depreciation, as at 9:18 on the dollar we paid 4.0384 PLN and 4.3020 per EUR
Jakub Stasik – Currency Analyst in XTB