To no surprise, both central bank’s kept interest rates unchanged at their current levels of 4.00% and 5.00% respectively. Markets did not react very strong since everybody was waiting for Friday’s U.S labor market report. Unemployment rate in the United States increased to 6.1% while nonfarm payrolls dropped by 83K in the last month. After the news were released, the EUR/USD rebounded from the week’s low at $1.4195 to $1.4320. Despite the bad news from the U.S labor market investors still seem to favor the American dollar. It has to do mostly with the weakness of the European economy.

While the U.S dollar is rebounding, the Polish Złoty is still slumping. The local currency follows the trend established by the Eurodollar. The gaining dollar caused the USD/PLN to increase from zł.2.2715 to zł.2.4005 throughout the course of the week. The EUR/PLN reached its highest level since April at zł.3.4350. There are signs that the Polish economy is slowing down although the last GDP reading was higher than expected. There is still room for another interest rate hike by the Monetary Policy Council but more experts predict that it will not happen this year. In the next couple of weeks the Polish Złoty will depend on the American dollar.   

Adam Narczewski