This past week can be called the “week of central banks” as many financial institutions (central banks of Canada, Australia, New Zealand, UK and Euro zone) announced the level of interest rates. Most attention was focused on the European Central Bank’s decision (kept interest rates at 4.0%) and the Bank of England’s interest rate cut from 5.75% to 5.50%. The GBP/USD reacted and declined from $2.0650 to $2.0310 throughout the course of the week. The EUR/USD after climbing to $ 1.4760 in mid-week, declined to $1.4640 on better-than-expected news from the US labor market. Employment in the private sector increased by 186K (forecast: 50K) while nonfarm payrolls by 94K (forecast: 73K).

No macroeconomic reports were published in Poland but declining global risk aversion helped the Polish Złoty. Stock markets in the US and Poland gained throughout the week making investors more keen on investing in riskier currencies. The EUR/PLN dropped from zł.3.6175 all the way to zł.3.5780. while the USD/PLN declined from zł.2.4690 to zł.2.4435. The interest rate hike by the Polish Monetary Policy Council last week by 25 basis points to 5.0% caused that credit installment payments increased. Borrowers having their debt denominated in the Swiss should not worry as the Złoty remains strong against the Swiss franc with the CHF/PLN declining to zł.21610.

Adam Narczewski